Media Coverage

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2019

 

In $46.5MM Transaction, Security Properties Places 267-unit Lakewood Apartment Asset with Equity Partner

April 2,2019

news.theregistryps.com

Seattle-based Security Properties, a national multifamily developer and investor, has placed the 267-unit Beaumont Grand Apartment Complex in Lakewood, Wash., with an LLC related with the company. The transaction, which totals $46.5 million, was completed at the end of March, according to Pierce County property records.
According to Davis Vaughn, senior director of conventional investments for Security Properties, the firm preferred not to disclose the name of its financial partner. However, with an equity partner secured, Security Properties will move forward with renovating the units over the next several years. Those renovations will include mid-spec upgrades, Vaughn said, including new appliances, lighting and flooring.
“We like the area a lot and our partner did as well, so we are going to continue to renovate all of the units and spend some additional money on the common areas as well,” Vaughn said.
The gated complex has a variety of one-, two- and three-bedroom apartments ranging in size from around 780 square feet to 1,145 square feet. According to the property’s website, rents can range from $1,300 for a one-bedroom up to $1,600 for a three-bedroom apartment. In-unit amenities include private balconies and patios, full-size washers and dryers and hard surface floors. Community spaces include a resident clubhouse, business center, sundeck and pool area, sports facilities and two playgrounds. Covered, on-site parking is also available.
Located at 8609 82nd St. SW, the complex is within close proximity to the Fort Steilacoom Golf Course, American Lake and Joint Base Lewis-McChord. A shopping complex anchored by Albertsons is also nearby, while eateries such as Kin Ja Teriyaki, Jimmy John’s and Starbucks are in proximity, as well. Surrounding residential development is mostly multifamily, with complexes like Brighton Place and The Harrison Apartment Homes just adjacent to the property.
Security Properties has been active in the Puget Sound — and nationwide — since its establishment in 1969. The firm, which specializes in the development and management of assets through a variety of public, private and non-profit partnerships, recently purchased downtown Seattle’s recently completed Hana Apartments from R.C. Hedreen Company. The transaction, which totaled $41.646 million, or about $260,000 per unit, also closed at the end of March. Today, Security Properties’ portfolio reflects a value of nearly $4 billion, with 112 assets and more than 22,000 multifamily housing units, making it one of the largest owners of residential real estate in the United States, according to its website.
 

Pearl District office building sale likely shatters Portland's high-water deal mark

March 21,2019

www.bizjournals.com

Seattle's Security Properties Development Company wasted little time in selling the office portion of its Heartline project in the Pearl District, unloading the five-story building just a year after vacation rental company Vacasa took all the available office square footage.
The developer announced this week it has sold the 72,100-square-foot building to Intercontinental Real Estate Corporation, an investment adviser based in Boston, on behalf of its U.S. Real Estate Investment Fund LLC.
View the full story: https://www.bizjournals.com/portland/news/2019/03/21/pearl-district-office-building-sale-likely.html
 

Mile High Opportunity

March 8,2019

www.untoldreturns.com

Untold Returns: Adventures in Impact Investing episode 3 travels to Northglenn, CO, once named, “the most perfectly planned community in North America,” by Life Magazine. A close suburb of Denver, Northglenn is feeling the impact of the region’s booming economy. As businesses and young professionals flock to the area, housing prices have gone up, pushing rentals out of the reach of families and forcing them to uproot in search of homes they can afford. But all is not lost. Impact investing strategies, including equity investments to preserve affordable housing, are making a difference.
In this episode, Bethany talks with Peter Lifari, Bryon Gongaware, Chris Herrmann and Joe Wishcamper about:
  • Affordable housing preservation as an impact investment strategy
  • The role of equity investments in preservation efforts
  • How affordable housing first gets created, primarily through Low Income Housing Tax Credits

http://dcs.megaphone.fm/PJA3708424407.mp3?key=3b8cf707192a764813377d7446e12e45&listener=105492d4-5ba4-45d2-b7b6-c3bd9e059442
 

Security Properties Acquires Highlands at Red Hawk Apartment Community in Castle Rock, Colorado

January 4,2019

Multifamilybiz.com

Security Properties purchased Highlands at Red Hawk, a 56-unit, Class-A, garden-style apartment community located in Castle Rock, CO for $16,500,000. Security Properties now owns 12 assets in Colorado totaling 2,393 units. The asset is a Class-A, garden-style apartment community constructed in 2018. The asset consists of 56 units spread out across five residential buildings and 4.55 acres. The units feature a variety of large, townhome style floor plans with direct-access garages, designer backsplashes, granite countertops, stainless steel appliances, in-unit, full-size washer/dryers and walk-in showers with custom tiles. Additionally, the property offers a comprehensive amenity package including a swimming pool, a small clubhouse, and a dog wash station.
Located in Douglas County – the 5th wealthiest county in the U.S. – Castle Rock is most notably recognized for its concentration of families, rolling hills, and quiet feel, despite its proximity to an otherwise booming market. Geographically, Castle Rock is distinctive in that it represents the median between Denver and Colorado Springs, the two biggest population centers in Colorado. Between Castle Rock and Denver lies the Southeast Business Corridor, home of 260,000+ employees sprawling 42 million square feet of office space.
Castle Rock has experienced incredible population growth over the past decade. From 2010 to 2018, Castle Rock's population grew by 39%, adding over 18,000 people and outpacing the tremendous growth seen elsewhere in the Denver MSA. Recently named the 10th fasted growing city by Livibility, Castle Rock is expected to grow an additional 34% by 2030 within a one-mile radius of the property. Notable in this growth is the presence of families. Per the U.S. Census Bureau, the average household size is 2.76, with a median age of 34. 65% of the households are represented by married couples, and ~45% have children.
Per Tad Johnson, Senior Investment Manager at Security Properties, "The Highlands at Red Hawk is a quality addition to our growing Colorado portfolio. The boutique-size of the Property provided a unique opportunity for a long-term investment in an attractive location. This asset will be wholly-owned by Security Properties, and Castle Rock remains a target submarket for future investment."
The property will be managed by Security Properties-affiliate Security Properties Residential.

2018

 

Security Properties Acquires 182-Unit Sanctuary Apartment Community in Portland for $58.3 Million

December 26, 2018

MultifamilyBiz.com

Security Properties and Tokyu Land US Corporation, a fully-integrated real estate investment and development firm, purchased Sanctuary, a 182-unit, Class-A, mid-rise apartment community located in Portland, OR for $58,300,000. This is Security Properties' 10th asset in the Portland MSA, and Tokyu Land's first.

Located along the Willamette River on the southern end of Portland, OR, John's Landing has become one of the most desirable neighborhoods in Portland. Unique to Sanctuary is its site plan that sits directly along the Willamette River, thereby providing unobstructed views of the river. The site also is bisected by the Waterfront Greenway Trail providing convenient bicycle and running trail access for tenants.
Built in multiple phases, the $1.9 billion South Waterfront community is one of the largest urban redevelopment projects in the nation. The South Waterfront offers a mix of boutique retailers, local bars, and restaurants. The area is anchored by OHSU, one of the biggest employers in Oregon with over 15,000 employees. OHSU is well underway on a multi-project expansion to its South Waterfront campus that will bring in many new medical professionals to the submarket.
Given Sanctuary's proximity to downtown Portlandas well as the MAX line, residents can access all of the key employers in the MSA with relative ease in addition to walking to the OHSU campus. Other notable employers in the submarket include: Under Armour, who moved into their new facility in 2017; Portland State University, the state's largest university; as well as the abundance of tech employers located Downtown, including Google, Oracle, and Jama Software.
Davis Vaughn, Senior Director of Investments at Security Properties says, "Sanctuary has an irreplaceable location along the river that will give it a permanent competitive advantage. Additionally, as OHSU continues to expand, the South Waterfront will only become more desirable as a place to live. Our asset is well positioned for growth and we look forward to unlocking value for our investors with this core acquisition."
Nobuhide Kashiwagi, president of Tokyu Land US, said, "We identified Portland as a growth market for us earlier in 2018, and are excited for our first purchase in the MSA. This asset is a great addition to our growing multifamily portfolio, and are looking forward to continuing our acquisitions in the Pacific Northwest. Sanctuary's quality construction and superior location provide us with a stable foothold upon which to grow."
The property will be managed by Security Properties-affiliate Security Properties Residential.
 

New owners of Kennewick apartments to invest $19.8M to overhaul 455 units

December 17,2018

Robin Wojtanik - Tri-Cities Area Journal of Business

A massive remodel totaling $19.8 million in improvements is underway at the Heatherstone Apartments in Kennewick, where work will continue through late spring 2020.
All 38 residential buildings will receive interior and exterior renovations, including new roofs, siding, parking lots, garage space and landscaping. For the individual units, tenants will benefit from an overhaul to kitchens, bathrooms and lighting, increasing energy efficiency and improved overall aesthetics.
“The purpose of this was to acquire and substantially rehab the property and preserve it for the long term, extending the affordability restriction for the next 30 years,” said Bryon Gongaware, managing director of affordable housing for Security Properties Inc., a Seattle-based owner, operator and developer that controls the tax credit partnership, which now owns the property. Gongaware sees the work as a necessary improvement since the 22-year-old complex is starting to show its age. “The property is really starting to wear out,” he said.
Walker Construction of Spokane is the general contractor on the project.
There is an income restriction for tenants who live at Heatherstone, located at 1114, 1138 and 1212 W. 10th Ave., near Park Middle School in Kennewick.
“This property was built in 1996 as an affordable housing complex and tax credit housing,” Gongaware said. “We came in with the concept and idea that we wanted to preserve affordable housing for the long term. We developed a game plan to set it up for the next useful life of the asset.”
The property has changed hands several times over the years, most recently purchased for $41.6 million on Nov. 21, under the limited partnership known as Heatherstone Preservation.
“Heatherstone Preservation is the ownership entity that acquired it as a general partner and ownership entity as a whole. We bought it as an institutional investor to deliver the tax credit,” Gongaware said.
The new buyers receive those tax credits through the Washington State Housing Finance Commission, or WSHFC, which describes itself as a “publicly accountable, self-supporting team, dedicated to increasing housing access and affordability and to expanding the availability of quality community services for the people of Washington.”
The WSHFC said it has created and preserved affordable homes for more than 334,000 people across the state in the past 32 years. It distributes federal housing tax credits, which allow developers to raise capital by selling the credits to investors.
For this project, the estimated tax-credit equity totals $23.2 million, with a tax-exempt bond worth $43 million and a taxable bond of $6.6 million.
“Every part of our state is experiencing a crisis in housing affordability, and the Tri-Cities is no exception,” said Karen Miller, chair of the Housing Finance Commission. “We’re very pleased to be able to finance not only new construction of affordable apartments, but also the preservation of existing ones like Heatherstone, which will now remain affordable for at least 34 years, thanks to the low income housing tax credit.”
Since the WSHFC formed in 1987, this tax credit has financed more than 30 properties in Benton and Franklin counties, creating or preserving 2,840 rental units and another 427 through the nonprofit bond program. The 455 units at Heatherstone include 95 apartments for people with disabilities.
“The city of Kennewick commends this non-taxpayer, private investment in our community,” said Kennewick Mayor Don Britain. “Quality of life is a top priority and strategic focus area for the city council. A necessary component for quality of life is affordable and stable housing options that support our growing city.”
Through a series of community meetings, residents of Heatherstone were made aware of the plans to remodel the complex, which will affect all the units, ranging from studios to three-bedroom apartments.
“Interior rehab for each individual unit will be sequenced on a building-by-building basis,” Gongaware said. “Simultaneously, the exterior rehab will go through in sequence and may or may not be simultaneous.”
Tenants will be moved to a “hospitality unit” on site for about a week while improvements are made to their unit.
Heatherstone Preservation will provide moving boxes and assistance with removing personal items from kitchens and bathrooms so work may be done, and the items eventually returned to newly-rehabbed cabinets and cupboards.
“We will do large investments in energy-efficiency to improve the overall environmental impact of the property,” Gongaware said.
Since the renovation process will take more than a year from beginning to end, residents will go through a formal communication process as their home is scheduled for improvements. This may include a 60-day, 30-day and one-week notice before a tenant is relocated to a hospitality unit.
“We are in no way kicking them out. There will be some inconvenience and we will do our best to minimize that. But this is a substantial improvement in their overall living space and community as a whole,” Gongaware said.
Exterior work will take place as the weather cooperates. Improvements include removing some of the extra garage structures to reduce the density of the complex, which spreads across nearly 25 acres.
“We think this will create a better resident experience,” Gongaware said.
Owners do not have an exact figure on the number of residents who live at the site, but most units are occupied. The complex includes 103 three-bedroom apartments, 200 two-bedroom apartments, 140 one-bedroom apartments and 12 studios. Units range from 502 square feet to 1,244 square feet.
Heatherstone is considered a “rent-restricted” complex. Gongaware said these restrictions are typically in place for 30 years, and since 22 years have lapsed since its original construction, there are a limited number of years remaining on the original regulatory agreements.
“We’re going to put it back through the tax credit system and put new 30-year affordability restrictions in place,” he said.
To live at the site, residents must go through an income certification process with a restriction that they may not make more than 50 percent or 60 percent of the area median income, as published by the U.S. Department of Housing and Urban Development guidelines. Rent is restricted based on income and the unit the tenant is living in, as the amount may be adjusted depending on how many qualified residents are in each unit.
On its website, Heatherstone Apartments lists typical rent costs at $562 for a studio and $597 for a one-bedroom. Residents can expect to pay between $718 and $876 for a two-bedroom and between $822 and $1,007 for the largest units on the property.
There are 10 employees at Heatherstone, with half of the workers in the office and the other half working as maintenance staff. The team manages and maintains the 38 residential buildings, as well as three community buildings and two pools. The community buildings also will be part of the multi-million dollar remodel.
 

Inside the deal: New Spring District apartment complex sparks $150M sale

December 7,2018

Sparc Apartments, the new five-building apartment complex in Bellevue's Spring District, traded hands Thursday for $150 million. Sieg Fischer, a California businessman better known for publishing than real estate investment, bought the 309-unit property that was the first project built in the $2.3 billion mixed-use Spring District. Developer Security Properties of Seattle developed Sparc with equity partner USAA Real Estate Co.
"This is my first big splash after having invested in some small things about 35 years ago," Fischer said.
He flipped those early investments — a trio of tiny apartment properties in California — and used the profits as seed money for AGI Publishing Inc. The Fresno, California company is an independent Yellow Pages publisher. Fischer said the investment in Sparc is separate from AGI.
"There's terrific potential for appreciation over time," he said, citing the location in the 36-acre Spring District, a former industrial area in the Bel-Red corridor east of downtown Bellevue. He has hired Avenue5 Residential of Seattle to manage the asset, which he bought with a loan from New York Life Insurance Co.
The Spring District is also home to Global Innovation Exchange, a Microsoft-backed education venture between the University of Washington and China’s Tsinghua University. Nearby outdoor gear cooperative Recreational Equipment Inc. is building an eight-acre headquarters, and Spring District master developer Wright Runstad is under construction on an office building Facebook is interested in leasing. Light-rail service is scheduled to begin in the district in 2023.
From the start Security Properties and USAA planned to sell Sparc, Security Senior Director Michael Nanney said.
Rents average $2.60 per square foot, according to Nanney, who said the occupancy was 100 percent in the summer but fell off in autumn. Averaged out over time the occupancy rate is around 95 percent, he said. Before the sale, Sparc was offering $3,000 gift cards plus six weeks of free rent to lure tenants.
Nanney said investor interest in Sparc was deep and included international buyers, though none of the foreign investors made offers due to the high hedging costs caused by the strength of the U.S. dollar.
GGLO designed Sparc and Walsh Construction built it. Brokers Kenny Dudunakis, Ben Johnson and Dave Sorensen of Berkadia listed the property for sale.
Sparc was Security's first new mixed-use development on the Eastside, and Nanney said the company is interested in doing more projects in the Bel-Red corridor though it has no property under contract.
 

Security Properties Acquires 420-Unit The Grove at City Center Apartment Community in Aurora, Colorado

November 12,2018

Multifamilybiz.com

Security Properties and funds managed by Oaktree Capital Management purchased The Grove at City Center, a 420-unit, Class-B garden style property located in Aurora, CO. This was Security Properties' fourth joint venture with Oaktree. With this acquisition, Security Properties has now closed on four market rate properties in Colorado within the last 12 months. In addition, they also own affordable housing properties throughout metro Denver.
Located at the crosshairs of East Mississippi Avenue and Interstate-225, The Grove at City Center boasts exceptional accessibility to local and regional amenities. East Mississippi Avenue, a primary east-west corridor, is a highly-traversed road that services 53,000 riders daily, thereby providing great drive-by exposure. Further, located just two blocks from Interstate-225, The Grove at City Center benefits from its quick access to a number of regional amenities / economic drivers within Denver, including the Fitzsimons Medical Campus, BuckleyAir Force Base, as well as the Denver Tech Center.
Units feature a mix of 1- and 2- bedroom floor plans, offering in-unit washers and dryers, a stainless steel appliance package, wood burning fireplaces, and air conditioning. Prior ownership had upgraded all common areas as well as unit interiors; however, Security Properties sees an opportunity to create additional value. The property-level business plan features light cosmetic-upgrades, including the addition of backsplashes, USB outlets, as well as under-cabinet lighting. When finished, the units will offer finishes that are unique to the properties in the comp set. Additionally, the property offers a comprehensive amenity package including a swimming pool, a remodeled clubhouse with lounging areas, a fitness room, as well as a dog park.
Tad Johnson, Senior Investment Manager at Security Properties says, "The recent renovations at The Grove at City Center resulted in an attractive income producing asset. The asset's central location in Aurora benefits from close proximity to a handful of marquee jobs nodes that are driving demand for housing. We expect the current strong fundamentals in the submarket to continue, resulting in durable cash flow for this long term investment."
Jared Lazarus, Managing Director at Oaktree, added, "As we continue to expand our income-producing, core-plus business through strategic relationships, we're excited to partner once again with Security Properties on another compelling transaction in a high-growth, supply constrained market. The Aurora submarket in the Denver MSA continues to exhibit some of the strongest apartment fundamentals in the United States"
 

Security Properties Acquires 440-Unit Arbor Creek Apartments for $84.3 Million in Portland Market

November 1,2018

Multifamilybiz.com

Security Properties purchased Arbor Creek, a 440-unit, Class-B garden-style community located in Beaverton, OR for $84,300,000. This is Security Properties' ninth asset in the Portland market. Sitting 25 minutes west of downtown Portland, the area is best characterized by its suburban neighborhood feel and convenient access to the largest employers in the Portland MSA. Arbor Creek benefits from its accessibility off of SW Tualatin Valley Highway, the primary thoroughfare connecting Hillsboro and Beaverton. Within a 10 minute drive, residents have access to an array of grocers, Regal Cinemas, a MAX line, and the Tualatin Hills Nature Park. The park, sitting directly adjacent to the property, offers 5 miles of scenic wetland walking trails spread out over 222 acres.
Beaverton is renowned globally for being the home of Nike. Nike, whose world headquarters is located less than 10 minutes from the property, has been drastically expanding their campus. Nike's employment in Oregon has increased by almost 60% since 2007, bringing total employment in Beaverton to 8,500 and 56,500 worldwide. To accommodate the increased headcount, construction began on a $380 million, 3.2 million square foot expansion in January of 2015, and the project's anticipated completion is slated for the end of 2018. Additionally, the largest employer in Oregon, Intel, has four campuses within 15 minutes of the property. Ronler Acres, their most regarded campus, serves as their largest concentration of facilities and talent in the world.
The asset represents a heavy value-add investment. The units at Arbor Creek offer a mix of 1x1 and 2x2 floor plans. Current ownership has renovated approximately 80% of the units with upgraded cabinets, resurfaced counters, vinyl flooring, faux stainless steel appliances, and upgraded light fixtures. Security Properties will be improving the units by installing vinyl planks throughout, in addition to spraying the countertops. Security Properties will also be updating the clubhouse, revamping the pool deck and improving the outdoor common spaces.
Davis Vaughn, Senior Director of Investments at Security Properties says, "Arbor Creek was a target for our portfolio because of the clear value-add opportunity. Additionally, with a significant supply-demand imbalance due to the suburban Portland job creation, Arbor Creek is well positioned for future growth. We look forward to implementing our business plan and creating value for our investors"
The property will be managed by Security Properties-affiliate Security Properties Residential.
 

Security Properties Acquires 364-Unit Stoneridge Farms at the Hunt Club in Tennessee for $55 Million

October 25,2018

Multifamilybiz.com

Security Properties and ReCap, a Reinsurance Group of America (RGA) company, purchased Stoneridge Farms at the Hunt Club, a 364-unit, Class-B+ garden-style community located in Gallatin, TN for $55,000,000. This is Security Properties' sixth acquisition in the Nashville MSA.
Gallatin is a suburban community 25 minutes northeast of downtown Nashville. Gallatin is widely recognized as a family friendly destination due to the abundance of natural amenities and great schools. Due to the asset's location just off of the Nashville Pike, residents can quickly access the regional amenities with relative ease. These notable regional amenities and economic drivers include Old Hickory Lake, Downtown Nashville, Nissan Stadium, as well as the Nashville International Airport. Locally, the amenities include Old Hickory Lake, Bluegrass Yacht and Country Club, and Streets of Indian Lake, a 250,000 sq. ft. open-air retail center that features a 16-screen Regal Cinemas, Barnes and Noble, as well as a host of other retailers and restaurants.
The asset represents a value-add investment with heavy renovation upside. The units at Stoneridge Farms offer a mix of 1x1, 2x1, 2x2, and 3x2 floorplans. Units currently feature oak, raised panel cabinet doors, laminate counters, a mix of vinyl and carpeting, and faux-stainless appliances. SP will be renovating all unit interiors to a high-end finish, consisting of stainless steel appliances, quartz counters, upgraded vinyl and carpeting, and new fixtures.
Tad Johnson, Senior Manager of Investments at Security Properties says, "Stoneridge Farms at the Hunt Club presented a rare opportunity for a full value-add renovation in an early-2000's vintage product. We are excited to not only be in Sumner County, but also to continue our expansion in the Nashville metro area."
The property will be managed by Security Properties-affiliate Security Properties Residential.
 

Invesco joins Seattle companies on ambitious Portland development

October 3,2018

Puget Sound Business Journal

Global real estate investment manager Invesco Real Estate has been busy in the Pacific Northwest in recent years and has joined the Seattle team bringing a three-building development to the Portland's Goose Hollow neighborhood.

Atlanta-based Invesco is investing in one part of the Press Blocks project by Urban Renaissance Group and Security Properties. The investment is in an eight-story office building called Canvas at Press Blocks. The 138,000-square-foot office building will rise at 1750 SW Yamhill St., directly east of Providence Park, where the Portland Timbers professional soccer team plays.
Demolition of a building that once housed The Oregonian newspaper's printing facilities should commence this week, with construction of the building starting this month. Lease Crutcher Lewis is the general contractor for the building, which GBD Architects of Portland designed. Canvas is scheduled to be done in June 2020.
None of the space has been pre-leased. JLL and Urban Works have been hired to find tenants for the office and retail space, respectively.
Phase II of the Press Blocks project will have a 23-story, 341-unit luxury apartment tower and a three-story building with nearly 20,000 square feet of office space and 12,000 square feet of retail. A landscaped pedestrian plaza will separate the buildings. This phase at 1621 S.W. Taylor St. also will have 475 stalls of underground parking.
Mithun of Seattle designed the second phase, which is expected to break ground early next year.
URG and Security Properties acquired the one-and-a-half-block site at 817 S.W. 17th Ave. from The Oregonian's parent company, Advance Publications, for $20 million in 2017. (Advance also owns American City Business Journals whose titles include the Puget Sound Business Journal and the Portland Business Journal.)
Invesco has sealed several sizable deals in the Portland area in recent years, including acquiring The Parker apartments, the LaSalle Apartments in Beaverton in partnership with Holland Partner Group and the nearly 400,000-square-foot Birtcher Center industrial park in Fairview.
In the Puget Sound region, Invesco in June paid $268 million for a Redmond property where Microsoft is a tenant, and three years ago it paid $67.4 million for an under-construction South Lake Union building that Facebook subsequently leased. And in 2013-14, Invesco paid a total of more than $531 million for new apartment buildings in Seattle and Bellevue
 

Security Properties Acquires Avalon Kirkland in Kirkland, WA

October 1,2018

Markets Insider

On September 27, 2018, Security Properties and an affiliate of Rockwood Capital purchased Avalon Kirkland, a 131-unit multifamily property located in Kirkland, WA. The property was originally built in two phases in 1968 and 1989-90 and features some of the largest units in the area—averaging 1,345 square feet.
Located just south of downtown Kirkland, Avalon Kirkland provides residents a high-quality experience associated with waterfront living in a highly-sought after, suburban neighborhood with convenient access to upscale retail, high-quality schools and the area's top employment centers. Across the street from the property is Carillon Point, a mixed-use development featuring the largest marina on Lake Washington, approximately 450,000 square feet of Class A office space, a 4-star waterfront hotel and an array of boutique restaurant and retail options. Downtown Kirkland, just one mile to the north, offers easy access to over 80 retailers, 200 restaurants, multiple waterfront parks and a farmer's market. Residents have direct access to the Cross Kirkland Corridor trail, a 5.75-mile walking, running, and biking trail, that provides convenient travel to both Downtown Kirkland and Downtown Bellevue.
Given the property's unparalleled location and irreplaceable setting overlooking Lake Washington, Security Properties and Rockwood Capital plan on extensively renovating the unit interiors while also adding a community common area. According to Davis Vaughn, Senior Director at Security Properties, the acquisition was made because, "We feel this is the best garden-style asset in the submarket. The outstanding views combined with the Kirkland location give us the opportunity to implement a higher-level renovation that will be unique relative to other rental product in this market. We look forward to creating value for our investors by renovating to a finish level and amenity set that is appropriate for irreplaceable real estate."
"Consistent with our longstanding investment philosophy, we believe the quality of a property's surrounding environment can be as important in contributing to rising and enduring value of an investment, as the buildings themselves," said Peter Kaye, Managing Partner, Rockwood Capital. "Located in a city with significant barriers to new development and very few property sales, Kirkland Avalon represented a rare opportunity to purchase an apartment community with exceptional physical attributes and a high-quality outdoor experience. These unique characteristics made the profile of this investment a perfect fit for our long-term investment vehicle."
The property will be managed by Security Properties-affiliate Security Properties Residential.
About Security Properties
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 48 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 83,000 residential units at a cost of over $5.7 billion. Security Properties Residential is the affiliated property management firm of Security Properties, created to increase the value of its real estate holdings by more closely managing its assets. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com
About Rockwood Capital
Rockwood Capital, LLC (Rockwood) is a real estate investment management firm founded in 1995 that invests in residential, office, retail, hotel and research and development properties that can be repositioned, recapitalized, developed or improved in select markets throughout the United States. Notably, Rockwood has extensive experience in the multifamily sector, represented by the firm's current 29 asset portfolio comprising 6,382 units across the country.
Rockwood and its principals have invested on behalf of their clients approximately $28.1 billion of real estate through ten value-add vehicles and ten separate accounts. Today, Rockwood has offices in New York, NY, San Francisco, CA, and Los Angeles, CA that manages a portfolio of approximately $3.4 billion of net equity value in approximately $6.8 Billion of gross real estate value as of 6/30/2018. Rockwood's investors include public and private pension funds, endowments, foundations, insurance companies, fund of funds, high net worth individuals and family offices.
 

Security Properties and Pacific Life Acquire Spokane Affordable Housing Community

September 17,2018

Markets Insider

On August 31, 2018, Security Properties and Pacific Life, in partnership with Hearthstone Housing Foundation, closed on the acquisition of Deer Run at Northpointe, a 222-unit affordable housing community located in Spokane, WA. This marks the second joint-venture affordable housing acquisition by Security Properties and Pacific Life.
Deer Run at Northpointe is a 222-unit garden-style community constructed in two phases. Deer Run North, delivered in 2003, consists of 114 residential units located in eight three-story buildings. Deer Run West, completed in 2005, consists of 108 residential units in five three-story buildings. The two phases share a leasing center, common laundry, and playground. Deer Run at Northpointe is fully rent-restricted, providing affordable rental housing for 187 households earning no more than 60% of Area Median Income (AMI), and for 35 households earning no more than 50% of AMI. "Deer Run at Northpointe is a high-quality asset located in a vibrant and rapidly growing submarket," says Jeff Garrison, a Director at Security Properties. "This is a unique opportunity to preserve quality affordable housing in a market where demand for this product type far outweighs available supply."
Deer Run at Northpointe was acquired with a fixed-rate loan from Freddie Mac, originated by Jones Lang LaSalle. As part of the acquisition, the new ownership group opted to participate in Freddie Mac's "Green Up" program, which supports the implementation of energy efficiency and water usage upgrades. Over the coming months the new property management agent, Security Properties Residential, will oversee a "Green Up" effort that will extend to all residential units and community spaces.
Deer Run at Northpointe is Security Properties' third affordable housing acquisition in Washington. The company's Affordable Housing Group maintains a national footprint with an existing portfolio of more than 8,000 units across 57 low-income housing assets. Security Properties owns more than 13,500 conventional units across 53 properties.
About Security Properties
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 48 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 83,000 residential units at a cost of over $5.7 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com
About Security Properties Residential
Security Properties Residential is the affiliated property management firm of Security Properties, created to increase the value of its real estate holdings by more closely managing its assets. Operating throughout the Western U.S., Security Properties Residential is committed to delivering exceptional service to its apartment communities and residents. Services include property, construction and compliance management services that create positive living environments for residents and build value for clients.
About Pacific Life
Celebrating 150 years of service, Pacific Life has helped millions of individuals and families with their financial needs through a wide range of life insurance products, annuities, and mutual funds, and offers a variety of investment products and services to individuals, businesses, and pension plans. Pacific Life counts more than half of the 100 largest U.S. companies as its clients. For additional company information, including current financial strength ratings, visit www.PacificLife.com.
 

Security Properties Acquires Tessera at Orenco Station in Hillsboro, OR

September 11,2018

Markets Insider

On September 5, 2018, Security Properties and Pacific Life Insurance Company purchased Tessera at Orenco Station, a 304-unit multifamily property built in 2014 and located in Hillsboro, OR for $85,000,000. Security Properties now owns a total of eight assets in the Portland marketplace Tessera is located within the outlying suburbs of the PortlandMetropolitan Area in Hillsboro, OR. Currently the state's fifth largest city with over 100,000 residents, Hillsboro enjoys award-winning urban planning, an affordable cost of living, a strong economic base and one of the state's most diverse populations. Often referred to as the Silicon Forest, Hillsboro is most widely recognized for the cluster of high-tech companies located within its boundaries. Case in point, Intel's Ronler Acres campus is now the company's largest operating hub and the site of its research and development group as well as its most advanced technical operations and top executives. The campus is conveniently located less than one mile directly north of the property.
From a retail perspective Tessera sits in an excellent pocket of Hillsboro. Residents benefit from access to an array of walkable amenities highlighted by The Orenco Station Town Center. The Town Center is located less than ½ mile north of the property and is anchored by a New Seasons Market, Starbucks and a variety of boutique restaurants. The Town Center also plays host to a local farmers' market on Sundays. The property offers outstanding regional connectivity as the Orenco MAX Station is located just a single block south (~3 minute walk) and offers access to a total of 97 stations covering 60 miles. Major stops along the light rail track include Beaverton (home to Nike's World HQ), downtown Portland and the Portland International Airport.
The business plan is to upgrade all eight of the property's designated common area spaces to offer top of the market amenities. The interiors will also be updated with vinyl plank flooring throughout all living areas, under-cabinet access lighting and a comprehensive technology package.
According to Davis Vaughn, Senior Director at Security Properties, the acquisition was made because, "Hillsboro has excellent fundamentals with convenient access to high paying employers. With the combination of walkable retail and a location adjacent to the light rail station, we feel Tessera is well positioned to be the top asset in the market once our value-add upgrades are complete."
The property will be managed by Security Properties-affiliate Security Properties Residential.
About Security Properties
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 48 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 83,000 residential units at a cost of over $5.7 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com
About Security Properties Residential
Security Properties Residential is the affiliated property management firm of Security Properties, created to increase the value of its real estate holdings by more closely managing its assets. Operating throughout the Western U.S., Security Properties Residential is committed to delivering exceptional service to its apartment communities and residents. Services include property, construction and compliance management services that create positive living environments for residents and build value for clients.
About Pacific Life
Celebrating 150 years of service, Pacific Life has helped millions of individuals and families with their financial needs through a wide range of life insurance products, annuities, and mutual funds. Whether your goal is to protect loved ones or grow your assets for retirement, Pacific Life offers innovative products and services that provide value and financial security for current and future generations. Pacific Life counts more than half of the 100 largest U.S. companies as its clients. For additional company information, including current financial strength ratings, visit www.PacificLife.com.
Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Client count as of June 2018 is compiled by Pacific Life using the 2018 FORTUNE 500® list.
 

Security Properties Acquires 162-Unit Insignia Apartments in Puget Sound Market for $29.5 Million

August 2,2018

MultifamilyBiz

Security Properties and a university endowment purchased Insignia, a 162-unit, newly constructed multifamily asset located in Bremerton, WA for $29,500,000. Security Properties now owns 19 assets totaling over 4,000 units in the Puget Sound marketplace.
Insignia is a 162-unit multifamily community located 2.5 miles north of downtown Bremerton. Delivered in early 2018, the residential units offer a mix of one- and two-bedroom floorplans with an average unit size of 877 SF.
Historically recognized as home to Kitsap Naval Base, Bremerton is gaining new attraction for its reasonably priced housing, emerging downtown, and easy commute. In 2017 Kitsap County introduced the "Fast Ferry," a passenger boat that runs from downtown Bremerton to downtown Seattle, dramatically shortening the commute across the water to just 30 minutes. In addition, downtown Bremerton is seeing a resurgence with a number of new hotels, restaurants, and redevelopments of boutique retailers and local businesses.
The asset represents a long-term yield investment with light exterior renovation characteristics. Notably, Security Properties will be adding a barbeque area, cabana with new patio furniture around the spa, package locker system, enhancing to the dog park, and an outdoor amenity space adjacent to the clubhouse.
Davis Vaughn, Senior Director at Security Properties says, "With the recent development in the downtown combined with the launch of the Fast Ferry, expanding into Bremerton was an easy decision for SP. With these exciting growth drivers, we look forward to delivering outstanding returns for our investors."
The property will be managed by Security Properties-affiliate Security Properties Residential.
 

Security Properties Acquires Seasons at Farmington in Bend, OR

July 18,2018

Markets Insider

On July 16, 2018 , Security Properties and a university endowment purchased Seasons at Farmington , a 228-unit, Class-A multifamily community located in Bend, OR for $45,500,000 . This is Security Properties' first acquisition in Bend.
Seasons at Farmington is located in the Old Farm District, just southeast of Downtown Bend . In recent years Bend has become nationally recognized for its relatively low cost of living paired with its high quality of life. Outdoor enthusiasts frequent the varying bike trails and walking paths, innumerable golf courses, rivers, and proximate ski resorts. Bend also boasts an array of breweries and restaurants, as well as the Les Schwab Amphitheatre, an outdoor, riverfront venue that hosts a mix of year round concerts and events.
Bend has become the home of a diverse and ever-expanding business community, anchored by a mix of biomedical companies, regional hospitals, national-scale microbreweries, resorts, and Silicon Valley tech transplants.
The units at Seasons at Farmington offer a mix of 1- and 2- bedroom floorplans. The apartment homes feature well-appointed kitchens, spacious walk-in closets, in-unit full-size washers and dryers, as well as private patios / balconies. Additionally, the property offers a comprehensive amenity package including a swimming pool, a clubhouse with lounging areas and a fitness center, a dog park, and an outdoor fire pit.
The asset represents a core-plus investment with light interior and exterior renovation characteristics. SP will be adding cosmetic upgrades to unit interiors as well as enhancing the existing amenity spaces.
Davis Vaughn , Senior Director of Investments at Security Properties says, "Bend has been a target market for SP for several years because of the compelling combination of affordability and quality of life. This is a top-of-the-market asset that should provide excellent returns for our investors as Bend continues to grow."
The property will be managed by Security Properties-affiliate Security Properties Residential.
About Security Properties
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington . For more than 48 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 83,000 residential units at a cost of over $5.7 billion . Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com
About Security Properties Residential
Security Properties Residential is the affiliated property management firm of Security Properties, created to increase the value of its real estate holdings by more closely managing its assets. Operating throughout the Western U.S., Security Properties Residential is committed to delivering exceptional service to its apartment communities and residents. Services include property, construction and compliance management services that create positive living environments for residents and build value for clients.
 

Security Properties Nabs Puget Sound Apartments for $54M

June 28,2018

Keith Loria - Multi-Housing News

The company, along with a university endowment, purchased Marq on Martin, a 248-unit property in Lacey, Wash. A partnership between Security Properties and a university endowment acquired Marq on Martin, a 248-unit, Class A multifamily property in Lacey, Wash., for $54.5 million.
With the deal, Security Properties ups its Puget Sound Portfolio to 18 properties totaling more than 4,000 units.
“We were initially drawn to the quality of the asset,” Davis Vaughn, Security Properties’ senior director-acquisitions, told MHN Additionally, by being able to capture a healthy spread between our debt and the going in cap rate, we can deliver yield from day one without having to do any heavy lifting. We also like the growth prospects of a market like Lacey long term.”
Originally built last year, Marq on Martin’s 248 units feature a mix of one- and two-bedroom floorplans and are spread out across 10 residential buildings on 12.06 acres.
“We buy all different profiles of apartment properties and in the current market, we felt this profile was excellent relative value,” Vaughn said. “This is a long-term hold that will allow us to deliver strong cash-on-cash returns to our investors.”
The property offers a clubhouse with a resident lounge, 24-hour fitness center, multiple outdoor dining/grilling stations and an outdoor heated pool and spa with an adjacent fire pit and lounging area.
“This is already a Class A asset, but we will be doing very light upgrades to the amenities,” Vaughn said. “We plan on adding a dog park, a package concierge system and lighting to the spa area.”
The City of Lacey is situated just five miles east of the state’s capital at the southern tip of the Puget Sound.
“With more than 1,200 acres of public parkland, an adjoining 3,700-acre national wildlife refuge, five freshwater lakes and several championship golf courses, the city is best characterized by its virtually unlimited opportunities for outdoor recreation,” Vaughn said. “The area also boasts a low crime rate, a healthy economy and close proximity to major metropolitan areas.”
Marq on Martin is conveniently situated just off of Martin Way, an arterial thoroughfare that runs through Lacey and connects into downtown Olympia. It’s less than a mile from Interstate 5, providing residents direct access south to the neighboring cities of Olympia and Tumwater and is close to Joint Base Lewis McChord and the City of Tacoma.
From a retail standpoint, Hawks Prairie Village Mall, a 154,000-square-foot shopping center anchored by Safeway, sits directly across the street. Several big box retailers also surround the mall including Costco, Home Depot and Best Buy.
In June, Security Properties teamed with Admiral Capital Group on the acquisition of the 240-unit Hamptons at Woodland Pointe in Nashville, Tenn., for $45.3 million.
The property will be managed by Security Properties-affiliate Security Properties Residential.
 

Admiral Capital and Security Properties Acquire Hamptons at Woodland Pointe in Nashville, TN.

June 12,2018

CNBC

On May 31, 2018, Admiral Capital Group and Security Properties purchased Hamptons at Woodland Pointe, a 240-unit multifamily property located in Nashville, TN.
Hamptons at Woodland Pointe is a Class B+ garden-style apartment community that was constructed in 2001 by Bristol Development. The residential units are a mix of one, two and three-bedroom floorplans with an average unit size of 1,092 SF. Unique from the other apartment communities in this area, direct access garages are included in 120 of the units (50%).
The business plan is a heavy value-add, in a secondary ring of a high growth metropolitan area. “We are excited to acquire this property in a strong market with a highly diversified economy and transform the community into a best in class asset,” said Admiral Co-Founder Dan Bassichis. “It is uniquely positioned given the large unit sizes, lower density layout and direct access garages and will benefit greatly from a major upgrade to the amenities and unit interiors.” Security Properties will renovate all of the unit interiors to a high end finish and redesign the clubhouse to be more functional and modern. Specifically, Security Properties will add washer and dryer appliances, stainless steel appliances, quartz or stone countertops, lower breakfast bars, and add modern cabinet faces. In the clubhouse, Security Properties will extend the pool deck to the clubhouse for a more seamless transition, as well as expand the fitness center into the theater room.
The property is located is located approximately 15 minutes east of downtown Nashville and 5 minutes from the Nashville International Airport (BNA). The asset is approximately 100 yards from Percy Priest Lake, Nashville’s primary recreational lake, and is near a variety of associated amenities. Hamptons is also proximate to corporate and industrial employers, aside from the 15 million square feet of office in the CBD. Nearby, just north of the Airport, is an approximate 5 million square feet of office in the Highland Ridge business park and surrounding areas, as well as another 5 million square feet of mixed use industrial in Elm Hill. Prominent employers in the area include Deloitte, TriStar Medical Center and Kroger Corporate.
According to Tad Johnson, Senior Investment Manager at Security Properties, “Hamptons was appealing to us because of the combination of unique product type and the location that is near not only dominant jobs nodes but also Percy Priest Lake. As the Nashville MSA continues to attract employers, the long-term competitive advantages at the asset-level should create value for our investors.”
“The investment in Hamptons at Woodland Pointe is the continuation of a long term relationship with Security Properties,” said Jarett Kaplus, Principal at Admiral. “We continue to proactively seek additional value-add multifamily investments nationwide, including increasing our presence in Nashville.”
SP now owns five assets totaling 795 units in the Nashville marketplace and the property will be managed by Security Properties-affiliate Security Properties Residential.
The acquisition represents Admiral’s first investment in Nashville bringing its units currently under management nationally to 12,032. Admiral Co-Founder David Robinson added, “Nashville’s impressive job growth and strong multifamily fundamentals make it an attractive investment target for Admiral and we are thrilled to expand on our success across the country into a new market.”

About Admiral Capital Group

Admiral Capital Group (“Admiral”) is a real estate and private equity investment firm with offices in New York, San Antonio and Seattle. Admiral was co-founded by David Robinson, US Naval Academy graduate, philanthropist and NBA Hall of Famer, and Daniel Bassichis, formerly of Goldman Sachs. Admiral invests in real estate through a series of discretionary funds and separate accounts, and targets value-add and core-plus opportunities in office, multifamily, hotel and retail properties. Admiral has acquired over $1.4 billion of real estate assets since 2008. Admiral's founders also have pledged 10% of their profits to philanthropic causes in certain areas where Admiral invests, building on Robinson's lifetime commitment to support education and lower-income communities. For more information, visit www.admiralcg.com.

About Security Properties
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 49 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 88,000 residential units at a cost of over $6.4 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com
About Security Properties Residential
Security Properties Residential is the affiliated property management firm of Security Properties, created to increase the value of its real estate holdings by more closely managing its assets. Operating throughout the Western U.S., Security Properties Residential is committed to delivering exceptional service to its apartment communities and residents. Services include property, construction and compliance management services that create positive living environments for residents and build value for clients.

 

 

In Portland, Ore., One Project With 2 Styles Reflects Its Neighborhood

June 12,2018

The New York Times

With two distinct buildings covering one city block, the Heartline development in this city’s Pearl District serves to unite the two halves of the surrounding neighborhood.
The project, between the warehouses that dot the south and the contemporary condos that dominate the north, brings both sides together by pairing commercial and residential structures of two different architectural scales and styles.
“The location we felt was ground zero in the Pearl District,” said John Marasco, the chief development officer of Security Properties in Seattle, Heartline’s developer. “And it was a full block that offered a lot of latitude in the design of the project and the types of uses that you could develop there.”
Over the past 25 years, the Portland area’s urban growth boundary, established under state law to limit sprawl, has heightened interest in the Central City, an area that comprises 10 districts near the Willamette River. Former industrial enclaves in the Central City such as the Pearl District and South Waterfront, as well as the Central Eastside just across the river, have become popular for commercial projects.
“Initially, the Pearl was a highly residential neighborhood,” said Jerry Johnson, managing principal of Johnson Economics, a consulting firm in Portland. “But you start seeing reinvestment in former industrial areas here as firms appeal to a younger work force that wants to live and work in the Central City.”
Twenty years ago, when the Pacific Northwest College of Art moved into a renovated warehouse on the block that Heartline now occupies, it seemed to cement the neighborhood’s transition. Much like New York’s SoHo neighborhood in earlier decades, the Pearl District was transformed in the 1980s and ’90s from industrial uses to a mix of residential lofts, art galleries and restaurants occupying renovated buildings.

But another era seemed to begin in 2013 when the art college announced that it would vacate the property for a new home. Security Properties bought the block for $11.75 million with higher-density redevelopment in mind.
Because the warehouse had been altered significantly over time, its demolition did not attract opposition. The N.W. 13th Avenue Historic District ends just one block to the southwest, which meant Heartline would avoid some scrutiny. But the project’s blueprints were subject to review by the city’s Design Commission and Bureau of Development Services as well as the Pearl District Neighborhood Association, which had the power to appeal the review decisions to the City Council.
The new architecture had to be right in both style and scale, so Security Properties decided on two separate structures, each responding to a different half of the district.
On the west side of the block is a five-story commercial building framed in wood, clad in brick and affixed with a raised loading dock to resemble the historic warehouses nearby. On the east is a sleek, 15-story tower of metal and glass offering 218 market-rate apartments.
The two halves share a public courtyard atop two levels of underground parking with 211 vehicle stalls and 350 bicycle stalls.
“What makes the Pearl District is, it’s a collection of smaller buildings,” said Bert Gregory, a principal with Mithun, the architect in Seattle that designed Heartline. “It seemed appropriate to have the two buildings and the open space on site. You wanted it to fit into the neighborhood.”


Though Heartline comprises 370,740 square feet of commercial, residential and retail space, the two buildings offer less square footage than would have been possible in a combined residential-commercial tower atop a podium on the same block.
“A lot of people want to maximize their density,” said Nathan Sasaki, executive director of Apex Real Estate Partners in Portland, which leased Heartline’s commercial space. “When you’re paying a lot for the dirt, you tend to see more podiums.”
He added: “This parcel, they happened to get at the right time and could approach it as less of a commodity-based podium building. They bought it before the market went from $300 to $600 a foot for the dirt.”
Also, codes for retrofitting masonry buildings like the warehouse that existed on the site have become increasingly stringent. That can add to the cost of a renovation.
“You think of industrial when you think of this neighborhood, but renovation is often more expensive than new construction,” Mr. Johnson, the consultant, said.
Initially, the developer planned only residential and ground-floor retail for the block; before Heartline, Security Properties had never developed commercial space. But in meetings with the Pearl District Neighborhood Association before embarking on the project, Security officials were surprised to hear a plea for office space.
“I think that creates a nice mix,” said Stanley Penkin, president of the association. “You put more eyes on the street, which I think is important. It creates more liveliness. It’s an opportunity for people to live and work in the same neighborhood.”
The project, which was completed this spring, has signed Vacasa, a vacation rental management company, as its anchor tenant. The 11-year lease covers 61,000 square feet of space on the top four floors of the five-story building.
Even so, Security Properties wanted to hedge its bet, requesting that Mithun design into the commercial building the flexibility to convert to residential.
“We wanted to make sure we had a module and a window layout that would facilitate turning those floors into residential units,” Mr. Marasco said.
Heartline was approved by the neighborhood association and the volunteer Design Commission, which lauded Mithun for channeling the district’s influences — brick, a loading dock, limited height — without creating a caricature of them.
Even so, residents of two nearby condominium buildings appealed the approval, arguing that Heartline was blocking their views. A series of revisions to Portland’s zoning code, known as the Central City 2035 plan, have been taking effect, and the residents’ group, Preserve the Pearl, contended that city staff had erred in interpreting the code’s language to grant the project additional height.
“The zoning is fairly new in Portland allowing for taller buildings, and they’re getting built,” Mr. Marasco said. “It’s really in the forefront of everybody’s daily life now.”
The City Council voted 5 to 0 to deny the appeal. That decision was then appealed to the state’s Land Use Board of Appeals, which affirmed it.
Although Heartline does not fall within the 13th Avenue Historic District, honoring the character of the nearby old buildings was important, said Tad Savinar, an urban designer and visual artist who is vice chairman of the Design Commission.
“Robert Morris made a piece in the ’60s called ‘Box With the Sound of Its Own Making.’ It’s a square wooden box, but it plays a tape of the artist making the box. It’s a very hip, conceptual piece,” Mr. Savinar said. “Those old buildings on 13th remind me of that. You can almost hear the trucks unloading.”
Heartline’s commercial structure “has the material and the bulk of an old building,” he added, “but it’s completely contemporary, so it’s not a slave to that history.”
 

Security Properties Nabs $59M Phoenix Community

May 24,2018

multihousingnews.com

Security Properties has shelled out $59 million for its ninth community in the Phoenix market. The firm collaborated with Oaktree Capital Management for the purchase of the 254-unit Pavilions on Central. Crow Holdings sold the property. According to data provided by Yardi Matrix, the transaction was subject to a $41 million Freddie Mac loan due in 2028 and originated by CBRE Capital Markets.

Pavilions on Central is located in Phoenix’s Midtown neighborhood, at 1 W. Campbell Ave. The community comprises 92 one-bedroom, 108 two-bedroom and 54 three-bedroom units, ranging from 807 to 1,366 square feet. More than 70 percent of units are either lofts or townhomes, with direct access to a garage. Common-area amenities at Pavilions include:
  • fitness center
  • business center
  • clubhouse
  • swimming pool
  • spa
  • 400 parking spaces
The location offers immediate access to public transportation, in the form of a light rail station situated across the street. Access to downtown Phoenix, multiple employers as well as entertainment, shopping and dining destinations is facilitated by proximity to Central Avenue. Carl T. Hayden VA Medical Center is situated just a mile away.
“Phoenix continues to have a very strong outlook for apartment fundamentals. Pavilions is a great opportunity for us to expand our income-producing, core-plus business,” said Jared Lazarus, managing director at Oaktree, in prepared remarks.
Prior ownership implemented a full renovation of the property between 2013 and 2016, with all units receiving high-end improvements. Security Properties plans to fully renovate the bathrooms, matching the previous high-end upgrades. Quartz counter tops, mirror surround, plumbing and lighting fixtures, and kitchen USB connections are planned. Exterior renovations are also on the horizon, including new paint, packaging system, a new fitness center, as well as a game room and lounge area.
“Pavilions on Central was appealing to us because of the combination of the rare town home-style product type and the location on a light rail. As Midtown continues to develop, these long-term competitive advantages should create value for our investors,” said Davis Vaughn, senior director at Security Properties, in a prepared statement.
Pavilions on Central will be managed by the owner’s affiliate, Security Properties Residential.
 

Security Properties to Rehab 120 Units in Commerce City, CO

May 9,2018

MultifamilyBiz

Security Properties closed the recapitalization of Village Crest Apartments, a 120-unit low-income apartment complex located in Commerce City, Colorado. Village Crest is a garden-style affordable housing property consisting of seven buildings that serves low-income families in northeastern Denver.
The property was originally constructed in 1999 utilizing 4% Low Income Housing Tax Credits and rents to families with incomes below 60% of area median income. Just blocks from the planned redevelopment of the former Mile High Greyhound Park, Village Crest presented an opportunity to preserve affordable housing in a submarket expected to experience significant growth in the coming years. "Demand for affordable housing across Denver continues to grow, which makes preserving existing affordable housing all the more critical," said Bryon Gongaware, Managing Director of Affordable Housing at Security Properties.
Security Properties secured an allocation of tax exempt bonds and 4% Low Income Housing Tax Credits from Colorado Housing and Finance Authority to finance the recapitalization, which will allow for a rehabilitation of the property over the next 12 months. That tax exempt financing was provided by Citi Community Capital, while R4 Capital provided the tax credit equity for the transaction.
The transaction also marks Security Properties' first partnership with Commerce City Housing Authority. "Partnering with Commerce City Housing Authority was key for us in this transaction. Being able to engage with local stakeholders to preserve and rejuvenate affordable housing for this community is a win for all involved," states Steve TeSelle, Director with the Affordable Housing Group at Security Properties.
The renovation plan will include expanding the existing clubhouse to add a fitness center, computer lab and laundry room, as well as adding an additional play area. The interior rehab will include new mechanical systems, kitchen appliances, cabinet fronts, countertops, lighting, and new fixtures and flooring in the kitchens and bathrooms.
Village Crest will continue to be professionally managed by Security Properties Residential.
 

Security Properties Acquires Affordable Housing in Park City, UT

May 9,2018

PR Newswire

On April 26, 2018, Security Properties acquired Elk Meadows, a 96-unit multifamily affordable housing property in Park City, Utah.

Elk Meadows is a garden-style community comprised of family units that are income restricted. The property was originally developed in 1993 utilizing Low-Income Housing Tax Credits (LIHTCs) from the Utah Housing Corporation (UHC). A Regulatory Agreement tied to that original source of financing deed restricts the property as affordable housing through 2023.
The acquisition of Elk Meadows is Security Properties' first in the state of Utah. The greater Salt Lake City metro, in particular, is a market that the company is quite bullish on and has been actively targeting for some time now. The relatively low cost of living, proximity to outdoor recreation, and abundant employment opportunities continue to attract new businesses and residents to the area which is promising for long-term investments in multifamily real estate. "This acquisition positions Security Properties into a highly desirable region from which to expand, and allows us to preserve high-quality affordable housing for the long-term in an area where there is an extreme shortage of affordable housing options," states Bryon Gongaware, Managing Director of the Affordable Housing Group for Security Properties.
KeyBank provided a 5-year term floating-rate loan on the property. The property will be managed by Security Properties Residential, an affiliate of Security Properties.
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 47 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 80,000 residential units at a cost of over $4 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists.
 

Security Properties Pays $41 Mil for 220 Residential Units

April 9,2018

rentv.com

Security Properties paid $41 mil for Willows at Printers Park, a 220-unit, Class B+ multifamily property located in Colorado Springs, CO. With this buy, Security Properties now owns three market-rate assets totaling 740 units in Colorado. Willows at Printers Park offers a mix of one-, two- and three-bedroom floorplans. The apartment homes feature well-appointed kitchens, spacious walk-in closets, in-unit full-size washers and dryers, as well as private patios / balconies. Additionally, the property provides a comprehensive amenity package including a swimming pool, a clubhouse with a small kitchen and attached business center, a playground, and a fire pit gazebo.

Willows at Printers Park is located just over two miles east of downtown Colorado Springs, at the base of Pikes Peak – one of the most famous mountains in America. Residents enjoy 300-plus days of sunshine per year, and outdoor enthusiasts frequent the city's bike trails, walking paths, and proximate world-class ski resorts.

The asset represents a value-add investment for the buyer. In addition to continuing the unit renovations initiated by prior ownership, SP will also be adding aesthetic upgrades to the clubhouse as well as expanding the amenity offerings.

The property will be managed by Security Properties-affiliate Security Properties Residential.
 

Colorado Springs apartment complex sells for record $77.6 million

April 9,2018

Rich Laden - Business Reporter - The Gazette

An Ohio real estate company has paid a record $77.6 million for a Colorado Springs apartment complex as out-of-town buyers continue to snap up properties in the Pikes Peak region's red-hot multifamily market. White Oak Partners of suburban Columbus late last month purchased the sprawling 332-unit Vue21 complex east of Powers and Union boulevards on the Springs' northeast side, El Paso County land records show.
The $77.6 million record purchase price beat a $73.3 million sale of a northside property in November 2016, according to Gazette archives. The Vue21 deal also represented a record per-unit price of $233,735; the previous record of $229,000 was set in August 2017 for a northeast complex.
Vue21's former owner, Passco Companies of Irvine, Calif., had purchased the complex for $54 million in December 2013.
Vue21's purchase by White Oak shows investors remain bullish on Colorado Springs and its apartment market, said Kevin McKenna, executive managing director in the Denver office of national brokerage ARA Newmark. McKenna and ARA Newmark director Saul Levy represented Passco in Vue21's sale.
"Colorado Springs is a market that has a lot of legs left, a lot of positive things going on," McKenna said.
At the same time, some large metro areas lack apartment properties for sale and buyers are turning to smaller markets such as Colorado Springs, he said.
Vue21 opened in 2009 on the Springs' fast-growing northeast side, which is a hub for residential and commercial development.
The apartment complex is near Memorial Hospital North, where UCHealth is adding a four-story tower as part of a $128 million expansion. On that same site, Children's Hospital Colorado is building a 294,000-square-foot, $166 million hospital.
A few miles to the south, St. Francis Medical Center is in the midst of a $102 million, 168,000-square-foot expansion.
"Job growth has been led by health care," McKenna said. Vue21 is "literally within walking distance" of a major medical hub that will see more office buildings and other spinoff development to serve the hospitals, he said.
The northeast side also is home to SuperTarget, Lowe's Home Improvement Warehouse, King Soopers and other retailers.
In a separate deal late last month, apartment giant Griffis/Blessing of Colorado Springs sold the 200-unit Willows at Printers Park, southeast of Pikes Peak Avenue and Printers Parkway in central Colorado Springs, for $41 million. Griffis/Blessing had purchased the property for $18.7 million in 2007, land records show.
Griffis/Blessing was represented in the sale by David Potarf, Dan Woodward, Matthew Barnett and Jake Young, who specialize in multi-family properties for CBRE, a national real estate company with Colorado Springs and Denver offices.
Security Properties Inc. of Seattle, which purchased the Willows at Printer Park, plans to upgrade the property's clubhouse and expand its amenities, according to CBRE.
 

Security Properties Acquires 220-Unit Willows at Printers Park in Colorado Springs for $41 Million

April 4,2018

Security Properties purchased Willows at Printers Park, a 220-unit, Class B+ multifamily property located in Colorado Springs, CO for $41,000,000. Security Properties now owns three market-rate assets totaling 740 units in Colorado.
Willows at Printers Park is located just over 2 miles east of downtown Colorado Springs. Colorado Springs, sitting at the base of Pikes Peak – one of the most famous mountains in America – is widely recognized for its abundance of recreational offerings. Residents enjoy 300-plus days of sunshine per year, and outdoor enthusiasts frequent the city's bike trails, walking paths, and proximate world-class ski resorts.
The units at Willows at Printers Park feature a mix of 1-bedroom, 2-bedroom & 3-bedroom floorplans. The apartment homes feature well-appointed kitchens, spacious walk-in closets, in-unit full-size washers and dryers, as well as private patios/balconies. Additionally, the property offers a comprehensive amenity package including a swimming pool, a clubhouse with a small kitchen and attached business center, a playground, and a fire pit gazebo.
The asset represents a value-add investment with interior and exterior renovation characteristics, specifically with regards to the amenities. In addition to continuing the unit renovations initiated by prior ownership, SP will also be adding aesthetic upgrades to the clubhouse as well as expanding the amenity offerings.
SP has closed on two market-rate deals in the past four months in greater Denver, and owns a portfolio of affordable housing properties along the Front Range. Colorado Springs is a growing market with notable development projects and a steadily expanding employment base. The relative affordability of Colorado Springs is continuing to bring new residents to the city.
Tad Johnson, Senior Investment Manager at Security Properties says, "The centrally located asset has been well maintained by previous ownership, allowing our venture to continue interior-unit upgrades that will create value. Colorado Springs is an attractive market that offers a compelling yield-premium relative to comparable secondary markets in the West."
The property will be managed by Security Properties-affiliate Security Properties Residential.
 

Security Properties fills office space in Portland's Pearl District complex

March 23,2018

In Portland's trendy Pearl District, the vacation rental property management company Vacasa announced this week that it will take all 61,000 square feet of the new office space at Heartline. Security Properties is developing the full block, two-building Heartline project, which is nearing completion.
In 2013, Security Properties paid Pacific Northwest College of Art $11.75 million for the almost one-acre site. Construction began in early 2016 on the mixed-use complex, which then was called Block 136.
The five-story retail and office building on the west side of the block shares a midblock courtyard with the 15-story, 218-unit apartment tower on the east side. For now, both share the address of 1241 N.W. Johnson St., though Vacasa's business entrance will be on Northwest 13th Avenue, a National Historic District.
Mithun designed Heartline, and Andersen Construction is building it. Mithun says the office tower is smaller and brick-clad to emulate the historic district, while the taller glass-and-steel apartment tower relates to the non-historic neighborhood to the north.
Heartline went through five rounds of design review before getting approval in early 2015. Both buildings are scheduled for completion in the next few months. They share two levels of underground parking with 211 vehicle stalls and350 bike stalls.
Heartline was designed to meet LEED gold certification. Total project size is about 367,000 square feet.
The west building will include about 10,000 square feet of ground-floor retail and commercial space in five bays facing both 13th and the central courtyard. The outdoor seating will be raised above the sidewalk at loading-dock height, suggesting both the historic district and the Gaslight District in Vancouver, B.C.
Future tenants will include Quickfish Poke Bar and Kure, a juice bar. Urban Works Real Estate is leasing the space, with only two retail bays remaining.
Privately held startup Vacasa has its current headquarters on the next block north of Heartline, in the separately owned RiverTec Building. It will keep the 36,000 square feet it is leasing there. (Unico Properties manages that building.)
GBD Architects of Portland will design the interiors for Vacasa, which expects to move in this August.
The company was founded in 2009 and now has about 1,800 employees worldwide (most of whom manage, maintain and clean rental properties), with about 320 at the Portland headquarters.
Eric Turner of JLL represented Vacasa on the 11-year lease, and Apex Real Estate Partners presented Security Properties.
In a statement, Security Properties' Michael Nanney said, "We've been watching Vacasa's fast growth over the years, and choosing them as a tenant was natural for us."
Vacasa founder and CEO Eric Breon said, "In the last year we've made tremendous strides as a company, from exceeding more than 8,000 properties in our portfolio to securing $103.5 million in Series B funding. Our team is growing rapidly, and we need a new space to support that."
 

Castle Rock apartment complex purchased for $50 million

February 1,2018

Seattle real estate investor Security Properties has purchased the Bluffs at Castle Rock apartment complex for $50 million.
It was purchased in a joint venture with Reinsurance Group of America, a Missouri life and health reinsurance company.
The 220-unit property has a mix of one, two and three-bedroom apartments. Amenities include a pool, fitness center and dog park.
"Castle Rock is an attractive submarket with long-term growth potential due to its proximity to Denver's Tech Center and RidgeGate, and The Bluffs at Castle Rock is a quality asset that we are excited to own," said Tad Johnson, an investment manager at Security Properties.
This is its sixth joint venture with RGA.

2017

 

Security Properties Acquires Eagle Pointe Apartments in Spokane Valley, WA

December 18, 2017

On December 6, 2017, Security Properties purchased Eagle Pointe, a 141-unit affordable multifamily property in Spokane Valley, WA for $12,850,000.
Eagle Pointe is a garden-style community comprised of family units that are income restricted. The property was originally developed in 1997 utilizing Low-Income Housing Tax Credits (LIHTCs) from the Washington State Housing Finance Commission (WSHFC). A Regulatory Agreement tied to that original source of financing deed restricts the property as affordable housing through 2028.
Security Properties is excited about the addition of Eagle Pointe to its growing Pacific Northwest portfolio that currently consists of nearly 7,500 units. The multifamily market fundamentals in Spokane County continue to trend in a positive direction as the attractive cost of living relative to other major PNW cities continues to attract new businesses and residents while the supply of new multifamily housing has lagged behind demand. "This acquisition increases our already strong investment in the Spokane County market, and allows us to preserve this high-quality affordable housing community for the next 10 years," states Bryon Gongaware, Managing Director of the Affordable Housing Group for Security Properties.
CBRE Capital Markets provided a 10-year term fixed-rate loan on the property. "It was a pleasure working with Security Properties to finance the acquisition of this property. We are particularly pleased to play a role in preserving much needed affordable units within this submarket," notes Jim Flinn, Senior Vice President of CBRE Capital Markets.
The property will be managed by Security Properties Residential, an affiliate of Security Properties.
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 47 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 80,000 residential units at a cost of over $4 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com.
News media contact:
Ed McGovern, 202.628.8019
 

Security Properties Snags $81M OR Community

December 14,2017

Security Properties and Cigna Investment Management have acquired Arbor Heights, a Class A garden-style community in Tigard, Ore., for $81 million. This purchase marks Security Properties’ fourth venture with Cigna. The property will be managed by Security Properties Residential. Located at 15199 SW Royalty Parkway, the 1997-built property features 348 one-, two- and three-bedroom floor plans ranging from 661 to 1,107 square feet. The community comprises 14 three- and four-story buildings. Interior features include washer/dryers, high-speed internet access, fully-equipped kitchens, walk-in closets and private balcony/patios. Residents have access to community amenities such as:
  • fitness center
  • clubhouse
  • playground
  • swimming pool
  • 870 parking spaces
  • outside storage 
Renovation Plan
The partners will focus on putting Arbor Heights through an extensive renovation plan in the coming year. The previous owner started with updating 54 units to include high-end finishes such as stainless steel appliances, quartz counter tops, faux wood flooring, new kitchen and bathroom hardware, digital thermostats, rainfall shower heads, USB outlets and new cabinet doors.
Security Properties will continue to make minor enhancements to these upgrades including adding quartz to the bathrooms, as well as new mirrors and interior doors. The remaining 208 units will also undergo an overhaul with the exception of 86 apartments that were renovated in 2008. Common area upgrades include the addition of a dog park area, outdoor kitchen adjacent to the pool, bike storage, outdoor living area and a package concierge.
“Arbor Heights was a deal we focused on because of the unique competitive advantages it has over the rest of the marketplace,” said Davis Vaughn, senior director at Security Properties. “With territorial views in many units, a walkable grocery store and a public school system about to receive $291 million in improvements via a recent bond approval, Arbor is ideally positioned long-term. When we combine these factors with our value-add renovation, we expect Arbor to perform well and create value for our investors.”
Arbor Heights is located on the border of the Bull Mountain neighborhood, Tigard’s most prominent suburb located within close proximity to Portland. In July, the partners acquired Soma Apartments in Bellevue, Wash.
 

Security Properties Acquires 256-Unit Martinique Bay Apartments for $42.75 Million in Las Vegas Submarket

December 6,2017

Security Properties purchased Martinique Bay, a 256-unit multifamily property located in Henderson, NV for $42,750,000. SP now owns six assets totaling nearly 1,800 units in the Las Vegas marketplace.
Situated just 20 minutes southeast of both the Las Vegas Strip and downtown Las Vegas Martinique Bay is located within the highly desirable Green Valley neighborhood, an 8,000-acre premier master-planned community.
Along with Summerlin, Henderson/Green Valley is widely considered the market's most desirable area to live. Average household income within a 3-mile radius of the property is 23% higher than the metro average.
The asset has a fantastic micro-location at the intersection of Sunset Road and Green Valley Parkway with a Trader Joe's anchored retail center next door to the site. With direct access to two major thoroughfares, residents are also afforded convenient access to a multitude of area dining, retail and entertainment options.
Martinique Bay is a garden-style apartment community that was constructed in 1989. It consists of only two and three bedroom units with an average unit size of 1,089 SF.
The business plan is a moderate value-add. To date, a total of 91 units have been upgraded throughout the property. Previously renovated unit interiors include: faux stainless steel appliances, re-surfaced laminate countertops, faux wood vinyl-sheet flooring throughout the living areas and new carpet in bedrooms, replaced cabinet fronts with hardware and painted cabinet boxes to match, light fixtures, plumbing fixtures, two-tone paint, scrapped ceilings, and six-panel doors. SP plans to continue this rehab strategy by renovating the remaining 165 original units to a similar interior scope. The business plan also includes the installation of a new dog park area, children's splash park, poolside fire pit with seating, three barbecue areas as well as a full exterior paint of the property.
According to Davis Vaughn, Senior Director at Security Properties, the acquisition was made because "Martinique Bay has an excellent in-fill location adjacent to a grocery store. This, combined with large units that cater to families, creates a great value proposition for those looking to access the local schools. With our rehab program, we will be able to offer renovated units at a price point significantly below new construction and create value for our investors."
The property will be managed by Security Properties-affiliate Security Properties Residential.
 

Security Properties Buys 178-unit Trax at DuPont Station Apartments for $32.25MM

October 30,2017

Jack Stubbs - The Registry Puget Sound Real Estate
Security Properties, a national real estate investment, development, and operating company based in Seattle, last week added another residential property to its Washington portfolio.
On Friday October 27th, the company bought the Trax at DuPont Station Apartments for $32.25 million, or roughly $181,180 per unit, according to public records filed with Pierce County. The seller was Spokane, Washington-based Garco Construction, a general contractor company that designs and builds a variety of property types nationwide. Completed in 2013, the 178-unit residential property is comprised of studio, one-bedroom and two-bedroom units. The studios range in size from 425 to 849 square feet, and the one-bedroom units range from 694 to 909 square feet, with the largest unit type ranging from 830 to 1,152 square feet. The units are designed in contemporary style, according to the property’s web site, with prominent unit features including spacious floor plan designs, rustic oak wood flooring, custom cabinetry, energy-efficient appliances and walk-in closets. Some of the other in-unit amenities include a balcony, fireplace and washer and dryer. The property also allows residents access to various community amenities as well, such as a business center, controlled access, garage parking and a swimming pool.
The apartment complex, located at 930 Ross Loop, is roughly one mile from the center of Dupont. The property is less than half a mile from access to Interstate-5 and lies 18 miles to the south of Tacoma. The property’s web site also highlight’s its close proximity to prominent employers such as Intel, JBLM and State Farm Insurance.
The seller, Garco Construction, operates across various industries including design-build construction, education, military, commercial, industrial, civil, sustainable and residential, according to the company’s web site. Some of the company’s projects in the Puget Sound region include St. Margaret’s Shelter, an 18-unit 20,000 square foot housing facility for women and children in Spokane; St. Anne’s Children & Family Center, a 20,270 square foot masonry facility in Spokane; and Operational Readiness Training Complex Barracks, a 4-story 61,116 square foot military barracks located in Joint Base Lewis-McChord.
Security Properties operates nationwide, with West coast target markets including California, Oregon and Washington. Nationally, the company has acquired or developed nearly 80,000 residential units at a cost of $5.3 billion across 530 assets, having sold over 63,300 residential units exceeding $3.4 billion in cost across 432 assets, according to the company’s web site.
The company owns properties throughout the Puget Sound in various areas including Seattle, Spokane Valley, Tacoma and Bellevue, among others. Some of the company’s Washington assets include Angeline, a 193-unit complex in Seattle; Aspen Village a 162-unit asset in Spokane Valley; Beaumont Grand, a 267-unit property in Lakewood; and Bordeaux, a 124-unit property in Bothell.
The company has been active in the Puget Sound Region in recent months. On May 31 2017, Security Properties and Intercontinental Real Estate Corporation purchased Echo Lake Apartments, a 289-unit apartment property with 8,999 square feet of retail located in Shoreline, WA, for $85.5 million. On June 23 2017, Security Properties and Cigna Investment Management purchased Soma Apartments, a 74-unit multifamily property located in Bellevue, for $28 million.
 

Built on Relationships: Developer continues to expand across the country, looking for ideal affordable housing opportunities

October 24,2017

Affordable Housing News
With its focus on forming strong relationships built on mutual trust and shared goals, Security Properties has become a leader in affordable housing acquisition and rehabilitation throughout the United States.
The firm, founded in 1969 and based in Seattle, acquired 3,166 affordable units in 2016 alone. Its 2017 pipeline includes over 1,300 units closed to date, with a total portfolio in excess of 19,000 apartment units.
“Security Properties is a long-term oriented investor and developer,” says Bryon Gongaware, Managing Director of Affordable Housing for the firm. “You can see that from our track record, and we continue with that philosophy today.”
Financial advisor Paul Pfleger founded Security Properties when several high-net worth clients were looking to defer their tax liability. He also had developer friends in search of capital. He introduced the two, and the rest is history.
The company quickly grew into one of the largest syndicators of affordable housing, but federal tax law changes in 1986 eliminated accelerated depreciation and dramatically changed the syndication business, leaving Security Properties in search of a new operation business platform with an enormous portfolio of properties to work with.
“In the mid-1990s, a new CEO realized we had a huge asset base with which to build a dynamic business platform,” Gongaware says. “The company decided to sell off a number of properties and use the capital to start two complementary business lines-Investments in conventional multi-family housing and development of high-end mixed-use properties.”
That decision established the three basic tiers of the company: affordable housing, ground-up development and conventional multifamily acquisition and renovation.
By the end of 2005, Security Properties had re-engaged its affordable housing acquisition efforts and closed on its first tax credit acquisition rehab community.
“We have continued to expand our affordable housing acquisition and development efforts ever since,” Gongaware says.
The firm’s successes and expectations are built on good relationships that help navigate the ups and downs of the investment world.
In 2010, Security Properties Residential (formerly known as Madrona Ridge Residential), the management unit for most of Security Properties’ holdings, was added to the mix. All four business units work across any economic environment, with affordable housing offering an offset to the risk typically seen in ground-up development.
ALWAYS MOVING FORWARD
In addition to protecting its capital partners, the team at Security Properties works hard to connect residents and build communities. The company is an active partner in search of creative ideas for new development opportunities.
“We want our residents to feel like the property is their home,” Gongaware says. “The more they do, the better the residents will take care of the property and create a high-quality community that people are proud to be a part of for the long term. That reinvestment in the community preserves the property for the long term and helps break the cycle of need for the affordable housing.”
The firm invests in resources to meet the needs of their residents and connect them back into the community. This means, for example, that properties have dedicated community space for residents and are located near public transportation. The communities also have computer learning labs for writing resumes, assessing job skills, finding job opportunities and learning English as a second language.
And, an after-school snack program provides much-needed resources for children with families that don’t have the resources for nutricious snacks and balanced meals.
“We are creating a community as opposed to just a place to put your head down at night,” Gongaware says. “Our mission is to create high quality housing where we would want our families to live. We want to create a sense of place in which to grow.”
CURRENT AND FUTURE PLANS
Marcella, acquired in 2016, is the latest example of that connectivity. It’s a 40-year-old, 206-unit senior citizen Section 8 property in Arvada, Colorado, that just recently completed a substantial tax credit renovation.
Gongaware says that most of the company’s properties have “what we refer to as a little pet project that is new and unique.” Marcella, for example, features a photovoltaic system on the roof to offset some of the property’s electrical expenses.
Denver is a part of Security Properties’ national reach into six key geographic regions that have a thriving economic engine and feature an affordable housing demand factor that drives on-going, long-term stability and cash flow.
Target markets are the Pacific Northwest (Washington, Oregon and Idaho), West (California and Nevada), Mountain West (Colorado and Utah), Midwest (Illinois, Minnesota and Wisconsin), Mid-Atlantic (Washington D.C., Virginia, Maryland and North Carolina) and Northeast (New York, Massachusetts, and Connecticut).
A long-term focus is fundamental for the vision of Security Properties to overcome market uncertainty, especially in light of potential tax reform happening at the federal level.
That said, Gongaware feels the last months have seen investment opportunities stabilize, with more tax credit equity investors aggressively coming back to the table.
“We are 10 percent below peak tax credit pricing that existed prior to the 2016 election and we still don’t have the framework for potential tax reform,” he says. “But we remain bullish about the investment in and preservation of affordable housing over the long haul.”
This bullishness is built on a long-term perspective, as the tax credit environment has proven to be a successful production engine for affordable housing over the past 30 years.
“At Security Properties, the tools are in place for long-term success and sustainability,” Gongaware says. “We continue to make investments and secure strategic relationships with that long-term vision in mind. Every step along the way, we have the mindset and vision to improve the communities where we work. We are focused on providing outstanding living experiences for our residents and exceptional returns for our investors.”
 

Nashville's West End area Duet 31 Apartments sold for $16.6 million

October 13,2017

Getahn Ward - Tennessean.com
A joint venture between a Seattle-based multifamily developer and a California university has paid $16.6 million for Duet 31 apartments off West End Avenue.
The purchase of the 80-unit complex at 300 31st Ave. near Centennial Park is the fourth in the Nashville area for Security Properties Inc. and Loma Linda University.
In April 2016, the partners paid $53.7 million for the adjacent former Opus 29 and the Music Row-area Note 16 apartment complexes. Then late last year, Security Properties bought the 250-unit Artessa apartment community in Cool Springs for $57.5 million.
"We expect the Nashville metro, and specifically the West End, to continue its growth and outperform in the long run due to its strong health care and education sectors, along with its millennial appeal and continued in-migration," said David Dufenhorst, CEO of Security Properties. "We look forward to holding this trophy asset for years to come."
An affiliate of Loma Linda University was the seller of the recently-built Duet 31, which sits on four tracts totaling 0.70 acres.
It has been combined with the adjacent 139-unit complex formerly known as Opus 29 to create a 219-unit apartment community now called Duet.
Nashville-based Stonehenge Real Estate Group was developer of the Duet apartments and Note 16.
Loma Linda University is a Seventh-day Adventist coeducational health sciences university in Loma Linda, Calif.
 

Security Properties Acquires $43M Sacramento Community: The 16-building community feature one- and two-bedroom units averaging 817 square feet. Cushman & Wakefield worked on behalf of the seller and the buyer in the transaction.

October 5,2017

Adina Marcut - MultiHousingNews
Security Properties, in partnership with New York Life Real Estate Investors, acquired The Henley Apartment Homes, a 240-unit community in Suisun City, Calif. MNCVAD II SP Henley Owner LLC bought the property from FPA4 Riverstone LLAC for $42.5 million, or $177,083 per unit. Jason Parr of Cushman & Wakefield represented both the seller and the buyer in the transaction.
Located at 313 Sandy Lane, The Henley is in close proximity to Fairfield, Napa, Vacaville, Sacramento, San Francisco and the Bay Area. The community offers convenient access to various shopping, restaurant and entertainment venues such as Vacaville Outlets, Solano Mall, Westfield Mall, Suisun City Marina, the Napa Valley Wine District and San Francisco Fisherman’s Wharf.
The 16 two-story buildings feature one- and two-bedroom units ranging in size from 750 to 850 square feet. Residents have access to unit amenities such as air conditioning, ceiling fans, large closets, washers and dryers, dishwashers and balconies. The pet-friendly community includes common area amenities such as:
  • business center
  • fitness center
  • playground
  • pool
  • three laundry facilities
  • disability access
  • covered parking spaces
  • spa

“This acquisition follows Security Properties efforts to acquire properties with renovation potential in supply-constrained markets and submarkets,” said Beau Madsen, manager at Security Properties. “The Henley represents a high-yielding asset at a compelling basis, and is well-positioned to undergo a renovation that will increase value for both our investors and Henley residents.”
Recently, the company sold 700 Broadway, a mixed-use apartment and retail property in Seattle’s Capitol Hill neighborhood.
 

240-unit Solano County apartment complex sells for $42.5M

October 4,2017

Jeff Quackenbush - North Bay Business Journal
A Seattle-based residential real estate investor and developer purchased a 240-unit apartment complex near Fairfield in central Solano County for $42.5 million.
In their third joint venture, Security Properties (secpropres.com) with New York Life Real Estate Investors acquired The Henley Apartment Homes at 313 Sandy Lane in Suisun City, the companies announced Wednesday. The purchase price equates to $177,083 per unit.
Security Properties is expanding its portfolio in Northern California. Recently, it purchased the 244-unit Sycamore Terrace complex in Sacramento for $57.4 million.
“This acquisition follows Security Properties efforts to acquire properties with renovation potential in supply-constrained markets and submarkets,” said Beau Madsen, manager at Security Properties. “The Henley represents a high-yielding asset at a compelling basis, and is well-positioned to undergo a renovation that will increase value for both our investors and Henley residents.”
“Moderate” interior renovations are planned for The Henley to modernize finishes in the units.
New York Life Real Estate Investors has been involved in a few North Bay industrial development projects through the MNCVAD fund it manages for a construction trade union pension fund. Those include the Greenwood Business Park project in south Napa and the Cader Corporate Center in Petaluma.
The deal between The Henley buyer MNCVAD II SP Henley Owner, LLC, and seller FPA4 Riverstone, LLC, closed Sept. 29, according to public records. Jason Parr of Cushman and Wakefield brokered the deal for both sides.
Security Properties started in 1969 to help clients manage taxes involved with U.S. Housing and Urban Development–sponsored investments. In that time, the company said it has acquired or developed over 83,000 residential units at a cost of more than $5.7 billion.
 

Seattle real estate investment firm returns to Sacramento with $57.4M purchase

September 25,2017

Ben van der Meer - Staff Writer - Sacramento Business Journal
A Seattle multifamily investment firm has returned to the Northern California market with a $57.4 million purchase in the Pocket neighborhood of Sacramento.
Security Properties announced Friday that it closed escrow on Sycamore Terrace, a 244-unit property that’s the newest large apartment complex in that area.
“We really like the Pocket neighborhood, and we liked the ability to buy at below replacement value,” said Dan Byrnes, managing director of conventional investments for Security.
Built in 2006, Sycamore Terrace is new enough to charge among the higher rents in that part of the region, and no new projects are on the horizon nearby.
Byrnes said Security is planning a light renovation of the property, focused especially on the clubhouse, which his firm feels could be a bigger attraction. Other property amenities include garages with units, laundry rooms in apartments and a pool. The apartments, averaging 1,041 square feet, are in 11 three-story buildings over 11 acres, at 40 Park City Court.
Sycamore Terrace is currently 100 percent occupied, and Byrnes said the property’s location should keep it attractive. “We like that residents have fast freeway access to job centers, to the central business district and to Elk Grove,” he said.
Security Properties has owned multifamily properties in the Sacramento market in the past, but this is its first purchase in the current market cycle, Byrnes said.
Sentinel Real Estate Corp. appeared to be the seller in the transaction.
 

Security Properties Residential Partners With Move For Hunger

September 18,2017

PR Newswire

Security Properties Residential has partnered with Move For Hunger, a national 501©3 non-profit that provides hunger relief, to combat food insecurity in the Greater Puget Sound and throughout Washington State. This partnership adds 30 apartment communities to Move For Hunger's rapidly expanding network and will help feed families throughout the Pacific Northwest.

One out of five children in Washington State lives in a household that struggles to put food on the table. One out of seven people depend on supplemental nutrition programs (food stamps). Twenty percent of all Washingtonians rely on their local food bank. Yet, despite the ever growing need to combat food insecurity, 30-40% of food in the US goes uneaten. Security Properties Residential in partnership with Move For Hunger, aims to redirect this food away from the landfills and into the hands of those who need it the most.
Security Properties Residential recognized that when residents move, they tend to discard a staggering amount of non-perishable food. Move For Hunger aims to redirect this food to local food banks and community pantries. Every week, Move For Hunger team members collect the non-perishable food items from Security Properties communities and delivers them to local food banks.
In its first three months of operation in the region, Move For Hunger has collected more than 1,000 pounds of non-perishable food items in the Greater Seattle area alone. In the eight years since its founding, Move For Hunger has collected more than 8 million pounds of food, equating to nearly 7 million meals.
Annamarie Calkins, Director of Account and Business Operations at Security Properties Residential, said, "We are very excited to partner with Move for Hunger, a charity that is making a huge difference for those families in need right here in our own backyard. This is a very important cause, and one that we will continue to focus on as an organization."
Security Properties Residential believes that this partnership further reinforces its commitment to community service and philanthropy. This year alone, Security Properties Residential and its affiliates have donated more than $56,000 to housing and hunger related charities. Additionally, Security Properties residential will be participating in Move For Hunger's Thanksgiving food drive in November.
For more information, please contact www.moveforhunger.org,
About Security Properties Residential
Security Properties Residential is the affiliated property management firm of Security Properties, created to increase the value of its real estate holdings by more closely managing its assets. Operating throughout the Western U.S., Security Properties Residential is committed to delivering exceptional service to its apartment communities and residents. Services include property, construction and compliance management services that create positive living environments for residents and build value for clients. For more information, please visit www.securityproperties.com.
About Move for Hunger
Move For Hunger is a 501(c)3 non-profit organization that aims to reduce food waste and feed families in need. By teaming up with relocation companies across the country, Move For Hunger is creating one of the nation's largest year-round service programs.
News media contact:
Mike Voorhees, 206.622.9900
176749@email4pr.com
 

With big acquisition, Seattle real estate developer doubles down on Portland

September 8,2017

Marc Stiles - Staff Writer - Puget Sound Business Journal
Seattle-based Security Properties and its partner Beijing Jade Investment Group of China have bought a 5-acre Portland property and has plans to redevelop it. The price was not disclosed.
Security Properties bought the PepsiCo Distribution Center that is between Interstate 84 and Northeast Sandy Boulevard at Northeast 25th Street in Portland. The new owners said they will develop market-rate and affordable housing and commercial office and retail space. The development will occur over the next several years. In the meantime, Pepsi will lease back its office and industrial space and work with Security Properties on a relocation plan.
Security Properties, which will serve as master developer of the property, is interviewing architects. Beijing Jade Investment Group will be Security Properties’ initial capital partner.
This is Security Properties' latest investment in Portland, which is the ninth-fastest growing metro area in the country, according to Forbes. Seattle ranked seventh on Forbes' list.
Security Properties owns more than 1,000 residential units. The company recently completed an apartment project in the city and is building a 218-unit mixed-use apartment project in the Pearl District, which also will have 15,000 square feet of commercial space on the ground floor and 60,000 square feet of office space above.
Earlier this year, Security Properties and Seattle-based Urban Renaissance Group paid $20 million for the Press Blocks, where The Oregonian newspaper operated printing presses on the edge of downtown. The Seattle companies have received design approval for a 250-foot-tall residential tower, which will have around 340 apartments, and a 140,000-square-foot office building. The project is scheduled to break ground early next year, said John Marasco, chief development officer at Security Properties.
Security Properties is a nearly half-century-old national real estate company that has acquired or developed more than 83,000 residential units at a cost exceeding $5.7 billion.
 

Developer purchases PepsiCo site on Sandy Boulevard

September 7,2017

Chuck Slothower - DJC Oregon
A Seattle-based developer is betting heavily that Sandy Boulevard will be the choice of a new generation.
Security Properties Inc. has closed on the purchase of a 4.7-acre Northeast Portland tract that has been used since the 1960s as a PepsiCo bottling and distribution facility, the developer announced Thursday. It plans to redevelop the superblock site offering market-rate and affordable housing, offices, retail space and other product types during the next several years, the developer stated in a news release.
The redevelopment would use the city of Portland’s Large Site Master Plan guidelines.
“We look forward to creating Portland’s next dynamic urban village through the city’s newly adopted 2035 Comprehensive Plan,” said John Marasco, chief development officer at Security Properties, in a prepared statement. Marasco was not immediately available for comment.
Security Properties is partnering with Beijing Jade Investment Group as its initial financial partner for the project. The sale price was not disclosed, and was not yet available via Multnomah County’s online property records.
“We’re excited for this partnership as well as the opportunity to create a thoughtful, amenity-rich community that further contributes to Portland’s urban development,” Beijing Jade Investment Group Vice President Xiaorong Zhai said in a prepared statement.
Security Properties will serve as master developer of the PepsiCo property. The company is in the process of interviewing architects to begin conceptual design for the multiphase redevelopment project.
The nearly 5-acre site offers a large canvas for development. In a public notice for an early assistance meeting with the Bureau of Development Services to discuss zoning, Security Properties revealed it’s considering four to five mixed-use buildings on the site, potentially including parking, retail, housing, offices and senior housing.
Sandy Boulevard is a key Northeast Portland arterial road that has retained a gritty character while other corridors such as Williams Avenue and Alberta Street have gentrified.
“We see Sandy becoming Portland’s next great boulevard, and this Large Site Master Plan will play a significant role in its continued transformation,” Gus Baum, director of development at Security Properties, said in the news release.
Sandy Boulevard’s width and lack of pedestrian-friendly design has proved an obstacle for some projects. Yet developers have begun to bring amenities to the corridor. Guerrilla Development’s Kevin Cavenaugh has built projects including restaurant-focused building The Zipper and office project New New Crusher Court to Sandy Boulevard.
Based in Seattle, Security Properties has expanded its presence in Portland with the Peloton Apartments on North Williams Avenue and Heartline in the Pearl District. Security is also the developer of a 250-foot-tall residential tower in Goose Hollow on the Press Blocks site. That project recently received design approval.
 

Security Properties Concludes Final Asset Sale For First Fund

September 6,2017

Security Properties today announced that it has sold the last of the 17 assets that comprised its first closed end discretionary multifamily real estate fund ("Fund I"). The remaining asset, 700 Broadway, was a mixed-use apartment and retail property in Seattle'sCapitol Hill neighborhood. With the completion of this sale, Security Properties concluded a six year process in which 2,471 apartment units across four states, totaling $392.5 millionof multifamily real estate, were successfully renovated and sold at attractive returns. Capital for Fund I was raised from accredited high net worth investors and deployed alongside different institutional limited partners and lenders on an asset-by asset basis over a two year investment period. All of the properties acquired were existing, cash flow generating assets that were enhanced through renovation, rebranding and managerial oversight by Security Properties and its in-house property management affiliate, Security Properties Residential.
The objective of Fund I was to assemble a moderately leveraged, geographically diversified portfolio of multifamily real estate properties that could be improved to generate attractive returns with lower risk than ground up development. The net was result was that, by employing average leverage of 55%, the $20MM invested into Fund I returned a net $48 million.
David Dufenhorst, CEO of Security Properties, stated: "The conclusion of Fund I was an extremely positive outcome for all parties involved. Our goal was to empower private investors to invest in institutional-scale apartment communities through a low volatility investment portfolio that could generate attractive risk-adjusted returns. With the conclusion of Fund I, that objective has been more than achieved."
The completion of Fund I is a significant milestone for Security Properties. Since forming Fund I, Security Properties has raised four other discretionary investment vehicles from individuals, multi-family offices, and institutions and has directed syndications of individual properties on a periodic basis. Fund I greatly enhanced Security Properties' investor base and allowed it to expand relationships with several institutional partners that continue to this day.
Ed McGovern, managing director of capital markets, stated "Fund I was raised during a period when the economic outlook was uncertain and capital markets where very tough, especially for 'first time' funds, regardless of whether the sponsor had a strong record of performance. Our investors put their faith and us and our entire organization worked as a team to deliver on those expectations. Today we continue to serve them as every investment is as critical to our success."
 

Security Properties Acquires 3-property Portfolio in Phoenix MSA

July 26,2017

CISION PR Newswire
On July 19, 2017, a joint venture between Security Properties and funds managed by Oaktree Capital Management, L.P. purchased Canyon Creek, a 440-unit property built in 1984 and located in Phoenix, AZ; Stillwater, a 516-unit property built in 1984 and located in Glendale, AZ; and Off Broadway, a 320-unit property built in 1986 and located in Mesa, AZ. Security Properties now owns a total of eight assets in the Phoenix marketplace.
Metropolitan Phoenix is one of the nation's fastest-growing regions, consistently recognized for strong job growth and an entrepreneurial environment. Affordability and a uniquely deep labor pool of applicable human capital continue to drive significant corporate investment in the market. Metropolitan Phoenix is forecasted to be in the top three major metropolitan areas in employment growth over the next two years. From 2017-2018, job growth is projected at 2.8% annually or roughly 112,000 jobs over the next two years. Metro Phoenix is also ranked #1 among major western markets for population growth through 2019[1].
The portfolio represents a value-add investment. The joint venture plans to upgrade 100% of the units with a consistent renovation spec. The new spec will include a black appliance package, sprayed countertops, new flooring as well as updated lighting and plumbing fixtures. Additionally, 236 units will receive washer/ dryers. Capital will also be focused on the upgrading of resident common areas/amenity space and addressing miscellaneous deferred maintenance items.
According to Davis Vaughn, Director at Security Properties, the acquisition was made because, "We are big believers in workforce housing, especially in metros with substantial job growth. The affordability of Phoenix relative to other west coast markets continues to attract renters and jobs to the area and this is why we are scaling up there. Once our renovation is complete, we will be able to offer competitive units to the market while still maintaining a basis significantly below replacement cost."
The property will be managed by Security Properties-affiliate Security Properties Residential.
About Security Properties
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 48 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 83,000 residential units at a cost of over $5.7 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com
About Security Properties Residential
Security Properties Residential is the affiliated property management firm of Security Properties, created to increase the value of its real estate holdings by more closely managing its assets. Operating throughout the Western U.S., Security Properties Residential is committed to delivering exceptional service to its apartment communities and residents. Services include property, construction and compliance management services that create positive living environments for residents and build value for clients.
About Oaktree
Oaktree is a leader among global investment managers specializing in alternative investments, with $100 billion in assets under management as of March 31, 2017. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 900 employees and offices in 18 cities worldwide. For additional information, please visit Oaktree's website at http://www.oaktreecapital.com/.
 

Security Properties Acquires Multifamily Portfolio Totaling 1,276-Units in Phoenix Marketplace

July 26,2017

MultifamilyBiz.com

A joint venture between Security Properties and funds managed by Oaktree Capital Management, L.P. purchased Canyon Creek, a 440-unit property built in 1984 and located in Phoenix, AZ; Stillwater, a 516-unit property built in 1984 and located in Glendale, AZ; and Off Broadway, a 320-unit property built in 1986 and located in Mesa, AZ. Security Properties now owns a total of eight assets in the Phoenix marketplace.
Metropolitan Phoenix is one of the nation's fastest-growing regions, consistently recognized for strong job growth and an entrepreneurial environment. Affordability and a uniquely deep labor pool of applicable human capital continue to drive significant corporate investment in the market. Metropolitan Phoenix is forecasted to be in the top three major metropolitan areas in employment growth over the next two years. From 2017-2018, job growth is projected at 2.8% annually or roughly 112,000 jobs over the next two years. Metro Phoenix is also ranked #1 among major western markets for population growth through 2019.
The portfolio represents a value-add investment. The joint venture plans to upgrade 100% of the units with a consistent renovation spec. The new spec will include a black appliance package, sprayed countertops, new flooring as well as updated lighting and plumbing fixtures. Additionally, 236 units will receive washer/ dryers. Capital will also be focused on the upgrading of resident common areas/amenity space and addressing miscellaneous deferred maintenance items.
According to Davis Vaughn, Director at Security Properties, the acquisition was made because, "We are big believers in workforce housing, especially in metros with substantial job growth. The affordability of Phoenix relative to other west coast markets continues to attract renters and jobs to the area and this is why we are scaling up there. Once our renovation is complete, we will be able to offer competitive units to the market while still maintaining a basis significantly below replacement cost."
The property will be managed by Security Properties-affiliate Security Properties Residential.
 

Security Properties and Housing Up Acquire Two District of Columbia Affordable Housing Communities

July 24,2017

CISION PR Newswire
On June 30th, 2017 Hedin House Apartments, a 48-unit affordable housing community located in Washington, D.C., was acquired by Security Properties in partnership with Housing Up Development, a local non-profit, for $3,300,000. This marks the second affordable housing acquisition by Security Properties and Housing Up Development in the District of Columbia this year. In February, the duo purchased Glenn Arms, a 55-unit historic multifamily community located in the Adams Morgan neighborhood for $8,800,000.
Hedin House, a 5-story mid-rise, was constructed in 1956 and renovated in 1973. It boasts 8,401 square feet of ground floor retail currently occupied by Seabury Resources, a local non-profit. The property houses senior and disabled residents with all units being income-restricted at 60% of Area Median Income (AMI). A Section 8 HAP Contract provides another layer of subsidy for 70% of project units. Affordability covenants have been extended for a 40-year term as part of the preservation transaction.
Hedin House was acquired using 9% Low-Income Housing Tax Credit (LIHTC) equity, a low-interest loan from the District's Housing Production Trust Fund, and a Construction-to-Permanent loan from Citi Community Capital. $8 million of tax credit equity was provided by R4 Capital, a New Yorkbased private capital syndicator. Over the next 12 months, the property will undergo a $115,000/unit renovation to modernize all major building systems and to enhance the aesthetic appeal and functionality of both residential units and common areas. A new community space and computer room will be added for resident use. Other improvements include all new kitchens and baths, new appliances, substantial electrical, plumbing and HVAC improvements, new flooring throughout, a new green roof, ADA accessibility enhancements, and new windows throughout. "We anticipate a dramatic transformation at Hedin House," indicates Jeff Garrison, Director of Affordable Housing at Security Properties. "We have worked closely with the Hedin House resident community from the outset of this project and we look forward to delivering a final product that will exceed expectations for years to come."
Glenn Arms is located in the vibrant and rapidly-growing neighborhood of Adams Morgan in northwest Washington, D.C. The site has two residential buildings constructed in 1910 and 1916 respectively. It is currently undergoing a 10-month rehabilitation at $100,000/unit that will modernize unit interiors and common areas, update all major building systems, and provide two additional units and a new community room. Upon completion, Glenn Arms will be ADA-compliant, and include a host of energy efficiency upgrades. All of this renovation work will be done while maintaining the historical integrity of the structure, and, going forward, Glenn Arms will be included on the National Historic Registry.
Funding sources for Glenn Arms include 9% LIHTC equity, Historic Tax Credit equity from the National Parks Service, a low-interest loan from the District's Housing Production Trust Fund, and a Citi Community Capital Construction-to-Perm Loan. The tax credit investor is R4 Capital who provided over $10.5 million of equity. "The Glenn Arms project offers us a unique opportunity to preserve part of D.C.'s historic fabric while extending rental affordability. There are few locations where the need for quality affordable housing is as great as it is in the D.C. metro area," said Bryon Gongaware, Managing Director of Affordable Housing at Security Properties.
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For nearly 50 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 81,600 residential units at a cost of over $5 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com
Housing Up Development is a non-profit affordable and supportive housing developer and manager with a growing portfolio of properties located throughout Washington, D.C. Projects include mixed-income affordable housing and permanent supportive housing for low-income and formerly homeless families and seniors. Housing Up specializes in a seamless approach to developing and managing housing while supporting families with comprehensive services. For more information on Housing Up, please visit www.housingup.org.
 

Security Properties Acquires 2 Portland Assets

July 21,2017

Adina Marcut - Multi-Housing News
Security Properties expanded its Portland footprint with the addition of two properties, The Commons, a 172-unit property and 5819 Glisan, a 56-unit community. PNC Bank provided the loan for the acquisition of The Commons.
Security Properties Residential, which was recently rebranded from Madrona Ridge, will be managing the properties.
Originally constructed in 1999, The Commons is located at 5800 NE Center Commons Way in the Mount Tabor neighborhood, just minutes away from downtown Portland. Additionally, a variety of parks and walking trails are nearby. The two five-story mid-rise buildings are fully affordable and offer one- and two-bedroom units averaging 172 square feet. The company plans to renovate the property in order to preserve the long-term affordability of the building.
5819 Glisan is a five-story market-rate community, located within close proximity to downtown Portland. Common area amenities include a fitness center, a playground and a garage. The property was built in 1999 in conjunction with The Commons.
Pillar Financial, a division of Sun Trust Bank, sourced the 10-year floating rate Fannie Mae loan. The improvements will be made to both the exterior and interior of the property. Upgrades will include new appliances, flooring, lighting, countertops, cabinet fronts and kitchen and bath fixtures.
“Renovation of The Commons will allow Security Properties to preserve the long-term affordability of the building while servicing the senior community for years to come,”Bryon Gongaware, managing director of Affordable Housing at Security Properties, said in prepared remarks. “Both the preservation and rejuvenation of affordable housing were our driving forces in this effort.”
 

Kinects tower ready for new residents

July 14,2017

Journal Staff - Daily Journal of Commerce

Security Properties received a certificate of occupancy on Monday for Kinects apartment tower at 1823 Minor Ave. in the Denny Triangle. The 41-story tower has 357 units, 4,800 square feet of ground-floor retail and 315 underground parking stalls.
Kinects' website shows studios ranging from 409 to 565 square feet, urban one-bedroom units of 543-619 square feet, one-bedroom units of 728-822 square feet, one-bedroom plus den units of 872 square feet, two-bedroom units of 980-1,335 square feet, and penthouses of 1,483-2,058 square feet.
An indoor swimming pool and a rooftop lounge called the Perch are on the top floors.
The 500,000-square-foot building was designed by Bumgardner and built by Andersen Construction Co. It is tracking LEED silver.
The DJC earlier this year reported that the budget is around $150 million, with financing from Pacific Life and State Teachers Retirement System of Ohio.
 

Madrona Ridge Changes Leadership

July 13,2017

Multi-Housing News

As part of the integration, the company added Mike Voorhees as a president for its Seattle office. He brings more than 23 years of experience in residential real estate management.
Security Properties affiliate Madrona Ridge Residential is being rebranded as Security Properties Residential. Many of Security Properties’ Seattle acquisitions are being managed by Madrona. The company also added Mike Voorhees as president.
“I look forward to building on the talent, experience and systems that have allowed Security Properties Residential to reach the point where it is today and to help expand the platform to serve the needs of our residents, partners and investors,” Mike Voorhees, said in a statement.
Voorhees has more than 23 years of experience in residential real estate management and 14 years of experience at Holland Partner Group as a regional vice president for the Washington/Arizona region where he supervised the renovation of 2,700 units and a total infusion of $18 million in capital improvements.
Prior to joining Holland Residential, Voorhees served as an investment manager for Pinnacle, overseeing 14 properties with a capitalization value of approximately $225 million. Throughout his career, he has become known for his leadership and commitment to growing and supporting his on-site associates. Voorhees attended Washington State University and studied business administration. Additionally, he is a managing broker in Washington State.
 

Madrona Ridge Residential to be Fully Integrated Into Security Properties Under New Leadership

July 10,2017

PRNewswire
On July 10, 2017, Madrona Ridge Residential, an affiliate of Seattle-based Security Properties, is being fully integrated into Security Properties and rebranded as Security Properties Residential. As part of this integration, Security Properties is also announcing that Mike Voorhees, formerly of Holland Residential and Holland Partner Group, has recently joined Security Properties Residential as President.
According to David Dufenhorst, CEO of Security Properties, "We are very fortunate to have found Mike Voorhees, who is clearly a cultural match for us, especially with his deep skills and experience. We look forward to Mike's leadership in growing our property management platform."
As Security Properties Residential, the firm's existing 426 employees will continue to provide exceptional residential management services for Security Properties residents, its high-net worth investors, and its institutional real estate partners and lenders. Madrona Ridge was created in 2010, after a 15 year non-compete related to the sale by Security Properties of its prior management company expired. Its purpose is to increase the value of its real estate holdings by more closely managing its assets.
Mike Voorhees, Managing Director and the new President of Security Properties Residential, stated: "I look forward to building on the talent, experience and systems that have allowed Security Properties Residential to reach the point where it is today and to help expand the platform to serve the needs of our residents, partners and investors."
Operating throughout the Western U.S., Security Properties Residential is committed to delivering exceptional service to its apartment communities and their residents. Services include property, construction and compliance management services that create positive living environments for residents and build value for investment clients.
Under this new organization, Security Properties Residential will have a unified brand and organization, and will be further integrated with the Security Properties platform to enhance coordination and risk management.
About Security Properties
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For nearly 50 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 81,600 residential units at a cost of over $5 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com
 

Security Properties grows in suburban Seattle with deals totaling $114M

June 28,2017

Marc Stiles - Staff Writer - Puget Sound Business Journal
Apartment landlord Security Properties of Seattle has acquired a large property in Shoreline and a smaller asset in downtown Bellevue.
This week the company and Cigna Investment Management said they paid $28 million for the eight-story Soma Apartments, 10703 Main St., in downtown Bellevue. Late last month Security Properties and Intercontinental Real Estate Corp., said they bought a large property called Echo Lake Apartments, 19270 Aurora Ave. N., in Shoreline. The buyers paid $85.5 million for Echo Lake, according to public records.
Security Properties is a national company that has bought or built more than 66,500 residential units, from affordable housing to high-end product, such as the new Kinects Tower in downtown Seattle.
Soma Apartments is a 6-year-old property with 74 units and two retail spaces. The concrete-and-steel building has a distinctive roof shaped like a pair of butterfly wings.
Security Properties Investment Manager Tad Johnson said the boutique-size apartments in a growing employment center where Amazon.com Inc. and other tech companies are expanding make it "a nearly irreplaceable asset." Security Properties plans to upgrade the interiors, possibly upgrading appliances and installing new flooring and lighting.
Public records list the seller as a limited liability company affiliated with Su Development of Bellevue.
Security Partners and Intercontinental were attracted to the 289-unit Echo Lake Apartments by its location, which is equidistant to jobs in downtown Seattle and at Boeing's Everett factory. Echo Lake already has RapidRide bus service and is near a future light-rail station. The property also is next to a 12-acre park.
"Echo Lake Apartments falls right in line with our strategy of buying in the best micro-location in a submarket," Security Properties Director Davis Vaughn said in a statement.
The plan is to upgrade the property, making it a high-end apartment. "Once we execute our business plan, we will be able to fully capitalize on the location by offering renters a high-end product adjacent to a lake that will be unmatched in Shoreline," Vaughn said.
In addition to the residential units, Echo Lake has nearly 9,000 square feet of retail.
Public records list the seller of Echo Lake Apartments as a limited liability company whose address is the same as the Inland Group, a Spokane-based developer of residential and commercial projects ranging from affordable family housing to luxury resorts. The sale comes as Inland Group is starting to build a large affordable apartment project in Seattle's Chinatown-International District. The city issued the project building permit last week.
Security Properties affiliate Madrona Ridge Residential will manage both the Soma and Echo Lake assets.
 

Bellevue, Wash., Spring District Takes Shape With Sparc Apartments

June 23,2017

Mary Salmonsen - Editorial Intern - Multifamily Executive
Security Properties has opened Sparc Apartments, the first residential community in the emerging neighborhood of The Spring District in Bellevue, Wash. The five-building complex offers 309 apartment units in a variety of configurations, including studios and one-, two-, and three-bedroom plans; townhomes; and live–work lofts, which were 25% leased after one month on the market.
“We couldn't be happier that The Spring District is finally opening its doors with the arrival of Sparc Apartments,” said John Marasco, Security Properties’ chief development officer, in a statement. “Our vision of shaping this new neighborhood into a destination for urban living has come into fruition. Each building will showcase its own unique personality through design,” Marasco said. “There are numerous home feature combinations to suit individual preferences, from gas cooking, custom cabinetry, and countertops to oversized floor plans and unique color palettes.”
Sparc’s community amenities include a rooftop courtyard and putting green, a fitness center, a pet washing station, a bike storage and maintenance center, and event space complete with demonstration kitchen and media lounge. The property also houses a 14,000-square-foot Bright Horizons Early Education center and playground, which Sparc residents are welcome to use on evenings and weekends.
The Spring District, when complete, is set to house 2,000 residents and support 13,000 employees on a 36-acre, transit-oriented urban neighborhood, with restaurants, retailers, and hotels. Recreational Equipment Inc. (REI) will move its headquarters to The Spring District in 2020, and the Global Innovation Exchange (GIX) graduate degree program, a partnership between the University of Washington, China’s Tsinghua University, and Microsoft, will be based in the neighborhood as well.
The Sparc community is located an accessible distance from employers including Google, Microsoft, and Overlake Hospital by highway, and, starting in 2023, the East Link Light Rail Service will provide access to Seattle.
Phase II of Security Properties’ residential contribution to The Spring District is currently under development and scheduled to open in late 2018. It will contain 279 units across three buildings.
 

Security Properties and Intercontinental Real Estate Acquire 289-Unit Echo Lake Apartments

June 6,2017

MulitifamilyBiz.com

SEATTLE, WA - Security Properties and Intercontinental Real Estate Corporation purchased Echo Lake Apartments, a 289-unit apartment property with 8,999SF of retail built in 2009 and located in Shoreline, WA. Security Properties now owns a total of 18 assets in the Puget Sound region. The asset was purchased in the fourth joint venture between Security Properties and Intercontinental.
Echo Lake Apartments are located in the Seattle suburb of Shoreline, WA. The community offers convenient access to major employment, transportation, retail and recreation. Twenty minutes south of Echo Lake is Seattle's Central Business District, the Pacific Northwest's largest employment center accounting for over 300,000 jobs. Twenty minutes to the north sits Boeing's Everett Factory. The factory employs over 40,000 workers and produces Boeing's large aircraft, 747s, 767s, 777s and the new 787 Dreamliner.
The location offers a wide range of transportation options as mass transit, SR 99 and I-5 are all easily accessible. The site is located directly on the rapid ride "E Line", neighboring the Shoreline Park & Ride and blocks from the Aurora Village Transit Center. Echo Lake is also adjacent to SR 99 and a 5-minute drive to I-5, offering direct routes north to Everett and south into the Seattle CBD. Additionally, the future Shoreline Light Rail Station site is less than 5 minutes southeast of the property.
The property is situated in a unique setting along the shores of Echo Lake. Immediately next to the resident clubhouse lies the 12-acre Echo Lake Park with expansive green space, boating, fishing, picnic areas, and a lake trail that connects into the 24-mile Interurban Trail.
Living at Echo Lake also provides residents access to Shoreline's top performing schools. The highly desired Shoreline School District is rated 9/10 by greatschools.org and #10 on the Niche.com 2017 list of Best School Districts in Washington.
According to Davis Vaughn, Director at Security Properties, the acquisition was made because, "Echo Lake Apartments falls right in line with our strategy of buying in the best micro-location in a submarket. With direct access to Echo Lake Park, this asset has a significant competitive advantage in its setting over other apartments in the area. Once we execute our business plan, we will be able to fully capitalize on the location by offering renters a high-end product adjacent to a lake that will be unmatched in Shoreline."
According to Jessica Levin, Senior Director, Acquisitions for Intercontinental, "Seattle is a dynamic market and we are excited about the employment drivers in the area. Upon the execution of our business plan, residents will benefit from an upgraded living experience with premier access to nearby retail, leisure and recreational amenities. This compelling combination makes Echo Lake Apartments an excellent long term investment for our investors."
Allen Logue, Associate Director, Acquisitions for Intercontinental added, "Intercontinental is excited to expand its Seattle area portfolio with our sixth acquisition. Echo Lake Apartments benefits from a 'first ring' suburban location exhibiting strong market fundamentals and close proximity to major arterials and public transportation nodes."
The property will be managed by Security Properties-affiliate Madrona Ridge Residential.
 

Seattle investors buy Ahwatukee apartments for $85.25M

May 25,2017

AZRE: Arizona Commercial Real Estate Magazine
A 576-unit, Class A multifamily complex, Andante, was sold to a Seattle-based real estate investment firm for $85.25 million, according to CBRE, the brokerage firm that worked on the deal.
Andante is located at 15801 S. 48th St., in Phoenix’s Ahwatukee submarket. The apartments are located west of Interstate 10 with visibility along Chandler Boulevard.
Tyler Anderson, Sean Cunningham, Asher Gunter and Matt Pesch with CBRE’s Phoenix office represented the seller, Chicago-based Waterton. The buyer was Seattle, WA-based Security Properties.
The multifamily complex, Andante,sold for $61.3 million in 2012. CBRE negotiated the deal then as well.
“Andante is a well-maintained suburban multifamily asset offering tremendous value-add upside,” said CBRE’s Gunter. “The property is located within a highly desirable, amenity-rich submarket with top-performing schools. Additionally, the property benefits from a high barriers-to-entry location.”
Built in 2000, the community features all one- and two-bedroom floor plans averaging 886 square feet per unit. Community amenities include three resort-style swimming pools, resident clubhouse, a 24-hour fitness center and an expansive dog park.
 

Security Properties Acquires Andante Apartments in Phoenix, AZ

May 25,2017

SEATTLE May 25, 2017 /PRNewswire/ -- On May 22, 2017, Security Properties and Pacific Life Insurance Company purchased Andante Apartments, a 576-unit multifamily property built in 2000 and located in Phoenix, AZ, for $85,250,000. Security Properties now owns a total of five assets in the Phoenix marketplace.
Andante is located within the highly desired Phoenix suburb of Ahwatukee. Located in the valley's southeast corner, Ahwatukee is best characterized by its affluent demographic, low crime rate, strong school district and close proximity to employment corridors. Additionally, the suburb's unique location at the foothills of the 16,000 acre South Mountain Park provides residents a convenient escape to over 50 miles of hiking, biking and horseback riding trails. Onsite, residents enjoy access to multiple retail centers including Lakeside Plaza, just one mile west with Trader Joes, Safeway and Fry's as well as the Ahwatukee Foothill Towne Center one mile to the north and anchored by Target, Best Buy and Home Depot
Ahwatukee is adjacent to the Chandler submarket, home to the largest concentration of technology jobs in the entire state. The corridor includes approximately 25,000 jobs including: Intel (11,400 jobs), Wells Fargo (5,100 jobs with a planned expansion to 12,000 jobs), Bank of America (3,900 jobs), Freescale Semiconductor (3,000 jobs), PayPal (1,900 jobs) and Microchip (1,600 jobs). Additionally, Intel recently announced it is investing ~$7B to complete a state-of-the-art semiconductor production facility at its Ocotillo Campus, which is located approximately 12 minutes southeast of Andante and expected to add over 3,000 new jobs.
The business plan is to renovate the clubhouse to offer top of the market amenities. The interiors will also be updated to a final scope that includes lowering the bar top and installing new hard surface countertops, appliances, flooring, paint, lighting fixtures and plumbing fixtures. The renovated units will still be priced materially below new construction rents providing a great value proposition for the area.
According to Davis Vaughn, Director at Security Properties, the acquisition was made because, "Ahwatukee has been a target submarket for us for years. With excellent schools and demographics, plus proximity to high-paying jobs, all of the fundamentals were in place at Andante for us to implement our value-add reposition program."
The property will be managed by Security Properties-affiliate Madrona Ridge Residential.
About Security Properties
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle, Washington. For more than 47 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 66,500 residential units at a cost of over $3.35 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com
About Madrona Ridge Residential
Madrona Ridge Residential is the affiliated property management firm of Security Properties, created to increase the value of its real estate holdings by more closely managing its assets. Operating throughout the Western U.S., Madrona Ridge Residential is committed to delivering exceptional service to its apartment communities and residents. Services include property, construction and compliance management services that create positive living environments for residents and build value for clients.
About Pacific Life
Offering insurance since 1868, Pacific Life provides a wide range of life insurance products, annuities, and mutual funds, and offers a variety of investment products and services to individuals, businesses, and pension plans. Pacific Life counts more than half of the 100 largest U.S. companies as its clients. For additional company information, including current financial strength ratings, visit www.PacificLife.com.
Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Client count as of June 2016 is compiled by Pacific Life using the 2016 FORTUNE 500® list.
News media contact:
Ed McGovern, 206.622.9900
161434@email4pr.com
 

On the Block: The Spring District is starting to sprout

May 25,2017

Brian Miller - Real Estate Reporter
“This is the best view,” says John Stokes contentedly, mimosa in hand, surveying the city he leads as mayor.
Indeed, we're standing on the roof of the newly completed Sparc Apartments in the Spring District. Looking west across Interstate 405, the downtown Bellevue skyline is impressive. So many new high-rises have gone up in recent years that the cluster rivals the skyscrapers of Seattle, which are foreshortened in the distance.
It's an optical illusion, but it's also an indication of change on the Eastside. To begin with, who'd ever have guessed that there would be nine-story towers in East Bellevue? It's the low-rise region associated with Auto Row, Lake Bellevue and Crossroads Mall.
The apartments in Sparc are now leasing, with monthly rents between $1,459 and $3,932. Sparc is the first project to open in the Spring District.
The Spring District has changed all that. Wright Runstad is undertaking the phased $2.3-billion redevelopment of 36 acres north of the Bel-Red corridor. The land is a former Safewaydistribution center, and the grocer still leases one building.
Shorenstein Properties of San Francisco is Wright Runstad's financial partner on the project, which will eventually have over five million square feet — including hotel, retail, office and residential space.
Mayor Stokes and I are gathered with others atop the tallest of Sparc's five towers, which sit on a shared garage at the southwest corner of the Spring District.
There's a putting green, fire pits, barbecues, clubhouse with kitchen, media room and all the expected amenities. Only this tower, Building D, has such a swanky roof deck, but it's open to all tenants at the 309-unit Sparc, which is opening in phases this year.
Sparc, developed by Security Properties and financial partner USAA Real Estate Co., began construction two years ago. GGLO designed it and Walsh Construction Co. built it.
The apartments are now leasing, with monthly rents between $1,459 and $3,932.
At a ribbon-cutting ceremony earlier this month Cindy Edens of Wright Runstad said, “We started working on this 11 years ago,” before the recession. From that initial master development plan, she said, “I think we're on our fourth or fifth MDP now.” Key to Wright Runstad's final plan was that “everything is accessible by walking.”
Looking west, the Bellevue skyline is impressive, but one day the Spring District will have over 5 million square feet of hotels, retail, offices and housing.
Most of the speakers noted the irony that it was hard to hear because of the construction noise from widening of 120th Avenue Northeast. “You can't build these buildings without streets,” said the mayor. “That's the sound of progress.” Council member Claudia Balducci quipped, “I love the sound of construction.”
Sparc is the first project to open in the Spring District, and 25 percent of the units are already rented. The 14,000 square feet of commercial space is leased to Bright Horizons, a child care facility that will open this fall. Security Properties has started construction on an unnamed 279-unit complex to the east, designed by Mithun, also built by Walsh. The three-building complex is scheduled to open next year.
Separately, Wright Runstad is developing the nearby Global Innovation Exchange (or GIX), a joint venture of the University of Washington and Tsinghua University. Classes will begin there this fall.
A brew pub is promised, which will face the interior green space, where new streets are also being added to the grid.
Just north up 120th, AMLI Residential is building 204 rental units, expected to open in 2019. And Recreational Co-op Inc. is scheduled to move into its new headquarters around 2020.
The Spring District's integrated light rail station will open in 2023.
“It's happening so fast,” says Mayor Stokes, who envisions more than just the light rail connection to Seattle, downtown Bellevue and Redmond. He says the planned Grand Connection will provide a bike-pedestrian corridor from Meydenbauer Bay — presently getting the $17.5 million Meydenbauer Bay Park — through the CBD, with a new crossing above I-405 to Wilburton (aka Auto Row) and branching both to the Spring District and the East Rail Corridor. The latter will become another bike-ped path that connects to the Burke-Gilman and other regional trails.
“We hope to have a plan approved by the end of the year,” says Stokes. All these connections are planned to converge with the light rail opening in 2023.
“We'd like to see it all start linking up,” he says. “It's a huge plan.”
Looking down on 405, still congested between the morning rush hour and lunchtime mini-rush hour, one is struck by how the Spring District is only about two miles from the CBD and Bellevue Square.
With more apartments likely for the Spring District and other stops along the light rail line, including 130th and Esterra Park, an east-west commute could potentially be much faster than the dreaded north-south crawl along 405.
John Marasco of Security Properties is certainly banking on that. Sparc is his first project in East Bellevue, and he likes the land costs compared to those downtown (“They're massive!”).
In this walkable new urban village, Marasco says, “It's dense but it's not downtown Bellevue-CBD dense. I just think it's a more attractive place to live than downtown Bellevue.”
If Wright Runstad decides to sell more Spring District blocks for residential development, he's interested. And with greater population density, he speculates, “I would like to put a grocery store here.”
But that's up to Wright Runstad. In the near term, “We have space that's convertible” from residential to commercial — meaning potential delis, coffee shops and the like for the residents of Sparc and future buildings.
And, echoing Mayor Stokes, Marasco nods to the skyline. “You're not getting this view from downtown Bellevue.”
 

Sparc Apartments Celebrates Grand Opening at Spring District Neighborhood

May 20,2017

Security Properties celebrated the opening of Sparc Apartments in Bellevue’s Spring District on May 18. Sparc is comprised of five buildings with 309 units, including; a studio, one, two, and three-bedroom apartments, townhomes, and live-work lofts. There will also be a Bright Horizons early education center that will share its playground with residents on evenings and weekends.
Amenities for the buildings include; a rooftop court yard with a putting green, a fitness center, pet washing station, bike storage and maintenance, WiFi cafe, and event space with a demonstration kitchen, game room and media lounge.
The apartments are accessible to major eastside employers like Google, Microsoft and Expedia. East Link Light Rail service will connect the neighborhood to Seattle and other areas beginning in 2023.
Sparc Apartments is the first project to open in Bellevue’s Spring District neighborhood. Adjacent to Sparc, Security Properties is building phase II, which will consist of three apartment buildings with 279 units, as well as two ground-floor commercial spaces for retailers and other service providers.
 

Security Properties Buys Bordeaux Apartments in Bothell for $26M

May 18,2017

Nellie Day - REBUSINESS ONLINE
BOTHELL, WASH. — Security Properties has purchased the 124-unit Bordeaux Apartments in Bothell for $26 million. The community is located at 16520 North Road.
Bordeaux Apartments has access to all three of the region’s largest employment centers, with Seattle and Bellevue 20 miles south and Everett 10 miles north.
The new owner plans to update the common areas and execute deferred maintenance. The unit interiors will also be renovated.
Security Properties-affiliate Madrona Ridge Residential will manage the property.
 

Sparc Opening Marks Arrival of Bellevue’s Spring District

May 18,2017

The Registry: Puget Sound Real Estate
Security Properties today celebrated the opening of Sparc Apartments in Bellevue’s Spring District. Sparc will be the first project to open in Bellevue’s emerging Spring District neighborhood.
Sparc consists of five distinct buildings offering a total of 309 studio-, one-, two-, and three-bedroom apartments as well as townhomes and live work/lofts. The new community also includes a 14,000-square-foot Bright Horizons early education center, which will share its playground with residents on the evenings and weekends.
“We could not be happier that the Spring District is finally opening its doors with the arrival of Sparc Apartments,” said John Marasco, Security Properties’ chief development officer. “Our vision of shaping this new neighborhood into a destination for urban living has come into fruition.”
Initial demand for the new apartment homes at Sparc has been strong, with nearly 25 percent leased after only a month on the market.
Sparc’s unique amenities, accessible to all residents, include a rooftop court yard with a putting green, a fitness center, pet washing station, bike storage and maintenance, WiFi cafe, and event space complete with a demonstration kitchen, game room and media lounge.
“Each building will showcase its own unique personality through design,” Marasco said. “There are numerous home feature combinations to suit individual preferences – from gas cooking, custom cabinetry and countertops, to oversized floor plans and unique color palettes.”
Overlooking downtown Bellevue, the Spring District is a 16 block, 36-acre, transit-oriented, mixed-use urban neighborhood located on a former Safeway grocery distribution center. This visionary campus, modeled after Portland’s thriving Pearl District, will be home to future retailers, restaurants, hotels and more than 2,000 residents and 13,000 employees.
Recreational Equipment Inc. (REI) will relocate its global headquarters to the neighborhood in 2020. Later this year the Global Innovation Exchange (GIX) – a partnership between the University of Washington, China’s Tsinghua University and Microsoft – will welcome its first students for a graduate degree program that combines project-based learning in design thinking, technology development and entrepreneurship.
Minutes from I-405 and SR 520, Sparc is accessible to major eastside employers like Google, Microsoft, Expedia, Overlake Hospital and T-Mobile. East Link Light Rail service – currently under construction – will connect the neighborhood to Seattle and other parts of the region beginning in 2023.
Adjacent to Sparc, Security Properties is building Phase II of their Spring District mixed-use residential development. Scheduled to open in late 2018, Phase II will consist of three buildings and 279 units of studio-, one- and two-bedroom apartments. The project will include two ground-floor commercial spaces, totaling 3,700 square feet, designed to attract neighborhood oriented retailers and other service providers.
Sparc project team:
· Developer: Security Properties
· Architect: GGLO
· General contractor: Walsh Construction
· Structural engineering: Cary Kopczynski & Co.
· Equity partner: USAA Real Estate Co.
About Security Properties
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle. For more than 45 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed more than 66,500 residential units at a cost of over $3.35 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com.
 

Security Properties buys Bothell complex for $26M

May 18,2017

Journal Staff - Daily Journal of Commerce
The 124-unit Bordeaux Apartments at 16520 North Rd. sold for $26 million.
The sale was recorded last week in Snohomish County records. Jeff Williams and Tim Brown of Moran & Co. arranged the deal.
The sellers were a group of LLCs led by Hamilton Zanze of San Francisco, which acquired the property in 2011 for $13 million. At that time, Hamilton Zanze said it would upgrade the garden apartments, which were developed in 1989 on 6.42 acres.
The property is near Martha Lake, east of Interstate 5, and about three miles northeast of Alderwood Mall.
Security Properties announced the acquisition this week, and said in a release that it will upgrade 96 apartments. Company affiliate Madrona Ridge Residential will manage the property.
Security Properties' Davis Vaughn said, “ Bordeaux offered us an asset priced significantly below replacement cost in an area with convenient access to both jobs and retail. Bordeaux has value-add potential we will unlock with our renovation program and enhanced management. As the Seattle MSA continues to grow, we expect this location to thrive resulting in excellent returns for our investors.”
Moran said the average unit size is 1,068 square feet. The transaction was worth about $209,677 per unit.
 

Top 10 Companies Completing Acquisitions in 2016

April 17,2017

Housing Finance
Company Info:
SECURITY PROPERTIES
701 Fifth Ave., Suite 5700; Seattle, WA 98104
(206) 622-9900
www.securityproperties.com
Security Properties specializes in the acquisition of senior and family affordable housing properties across the country.
  • Rank (Vs. 2015): 4 (new)
  • Executive Contact: Bryon Gongaware, managing director
  • Affordable Housing Units Acquired in 2016: 3,166
  • Region(s): National
  • Organization Type: For-profit
View Full Article Here: Top 10 Companies Completing Acquisitions in 2016
 

Accelerating Demand, Deliveries Set the Tone for Nashville’s Apartment Market

April 3,2017

John Nelson - Rebusiness Online

The Nashville multifamily market’s roll continued through the end of 2016 with nearly 6,400 units absorbed, a 10 percent increase compared to 2015, according to Axiometrics. This demand was fueled by steady employment growth of nearly 28,000 new jobs, led by world-class healthcare employers, educational institutions and a burgeoning tech scene. The rate of job growth in Nashville is currently about 50 percent faster than the national level, and as a top destination for young people and the creative class, it’s becoming a cultural and entertainment destination that’s nationally recognized.
Rental rates grew on average by 5.6 percent in 2016, buoyed by the fact Nashville had the nation’s second-highest rate of wage growth at 5.3 percent, behind only the Silicon Valley tech hub of San Jose, according to Headlight Data. Average market occupancy remained tight at an average rate of 96 percent, with the Murfreesboro, Southeast Nashville (Antioch) and Sumner County submarkets being the highest performers to end the year.
Four submarkets saw rent growth over 7 percent in 2016, including Southeast Nashville, Wilson County/Hermitage, Airport/Briley Parkway and Rivergate/Hendersonville. Submarkets with concentrations of new supply lagged the market average, highlighted by Downtown and Williamson County.Russ Oldham, CBRE
Transaction volume set a new mark in 2016 as well, with over $1.4 billion in transactions. The value-add space led the way in volume with $862 million, while Class A volume totaled $546 million. Cap rates compressed slightly across the board, although time will tell if the spike in Treasuries at the end of 2016 eroded some of those gains.
Cap rates on infill product range from the mid 4s to low 5s, depending on the asset quality, leasing status and location. Several high-rise assets are expected to stabilize in 2017, and the market is eager to see a new high-water mark if these assets come to market.
The suburban Class A market is more nuanced, with cap rates in the high 4s and very low 5s in Williamson County (Cool Springs), and low to mid 5s in the other submarkets of Mt. Juliet, Sumner County and Rutherford County.
The value-add market is also very tied to specific asset upside and location quality. The opportunities in this space seem to be thinning out compared to a few years ago. However, the best opportunities are generally trading in the low to mid 5s, with stabilized cap rates projected into the low 6s.
Not Over-Supplied for Long
Permit activity dropped for the first time in years, falling 10 percent to 6,200 units in 2016, however supply is projected to peak in 2017 with just under 8,500 units on schedule to deliver, according to Axiometrics. Approximately 60 percent of these deliveries will be scattered throughout the urban submarkets, including several new high-rise projects that will cater to the renter-by-choice segment of the market. It’s likely 2017 will be a more challenging year for lease-ups in certain urban pockets, but with renter demand firing on all cylinders and new supply virtually coming to a halt in 2018, this should be corrected in short order.
In the suburbs, supply is being delivered at a much more manageable pace. Entering 2017, Williamson County only had 1,216 units under construction, as lease-ups from 2016 are reaching stabilization, and the submarket is expected to get even tighter in 2017. Rutherford County is seeing explosive growth and there are several new projects set to meet the expanding renter demand, with 639 units expected to deliver in that submarket. It’s worth noting Murfreesboro is under a moratorium for new multifamily rezonings, as city officials examine how to grow more strategically.
Wilson County, headlined by Mt. Juliet, has become a very tight submarket, with population growth pacing Murfreesboro, but with new multifamily projects facing major entitlement challenges. Look for a Class A sale in the first quarter of this year that will put this submarket firmly on the map as a top suburb in Nashville moving forward. Sumner County (Hendersonville and Gallatin) has virtually no new supply on the horizon, so look for this submarket’s fundamentals to outperform the MSA over the coming year.
In 2016, after over a year of debate, Nashville passed an inclusionary zoning policy, which will be adopted in the first half of this year. The net effect of this bill is that in most urban locations of Nashville, new projects that require rezoning must set aside a percentage of its units to meet certain workforce housing income limitations. Although, the city has set up a funding mechanism whereby the developer/owner will be reimbursed on an on-going basis by the amount of foregone rent, this will no doubt make new development more difficult in the near term.
 

Security Properties to Rehab Illinois Community

April 3,2017

Laura Calugar - MultiHousingNews
The Seattle-based company closed on University Village, a 534-unit affordable housing development in DeKalb, Ill. The new owner will renovate the property, which will maintain its affordable status for at least the next 15 years.
Security Properties, a national real estate investment, development and operating firm, recently recapitalized University Village, a 534-unit multifamily property in DeKalb, Ill. Evergreen Real Estate Services is the manager of the community. According to housingfinance.com, University Village will preserve its affordability for at least another 15 years.
Located at 722 North Annie Glidden Road, University Village is a garden-style community including both townhouses and apartments. According to Yardi Matrix data, the 45-building property features 98 one-, 272 two- and 44 three-bedroom units. The amenity package includes a fitness center, a business center, tennis and basketball court and swimming pool, as well as 1,050 parking spaces. The rehabilitation will upgrade kitchens and bathrooms, provide significant exterior and site improvements including modifications related to ADA accessibility, as well as an expansion of the existing community center to include a resident resource and activity area.
The property is a mixture of project-based Section 8 housing, as well as income restricted units at 60 percent of the area median income. Originally developed in the ’70s and ’80s with various financing incentives offered by the U.S. Department of Housing and Urban Development and the Illinois Housing Development Authority, the property is a fully affordable suburban Chicago asset. Two of the three phases of construction also participated in the Low Income Housing Preservation and Resident Homeownership Act in 1995.
In June 2016, Security Properties received an allocation of 4 percent Low Income Housing Tax Credits, which facilitated the current recapitalization. The allocation was paired with an issuance of tax-exempt bonds by IHDA and 223(f) HUD-insured permanent financing sourced by Pillar Finance, a division of SunTrust Bank, with PNC Real Estate partnering with Security Properties as the tax credit equity investor.
The rehabilitation process will occur during the next 12 months.
Last month, Security Properties purchased Orchard Club, an affordable community in Las Vegas, for $27 million.
 

Security Properties Set to Rehab Illinois Development

March 31,2017

Donna Kimura - Deputy Editor - Affordable Housing Finance
University Village, a large affordable housing development in DeKalb, Ill., will undergo a major rehabilitation after being recapitalized by Security Properties.
The development is a key source of affordable housing in the area with 534 units of both townhouses and apartments. University Village provides a mix of project-based Sec. 8 housing as well as income-restricted units at 60% of the area median income.
The community was developed in the 1970s and 1980s utilizing various financing incentives offered by the Department of Housing and Urban Development (HUD) and the Illinois Housing Development Authority (IHDA). Two of the three phases also participated in the Low Income Housing Preservation and Resident Homeownership Act program.
Last June, Security Properties received an allocation of 4% low-income housing tax credits, which is facilitating the current recapitalization. The housing credits are being paired with an issuance of tax-exempt bonds by IHDA and Sec. 223(f) HUD-insured permanent financing sourced by Pillar Finance, a division of SunTrust Bank, with PNC Real Estate partnering with Security Properties as the LIHTC investor. Stifel served as the bond underwriter and investment banker.
"The revitalization of University Village is a complex undertaking that combines the restructuring of numerous regulatory agreements, layering of multiple sources of financing, and renovation of an entire apartment community for current and future residents. The Security Properties team was unrelenting in pursuing everything needed to get this deal done," said Peter Nichol, managing director within the Pillar division of SunTrust Bank, which provided the FHA-insured loan for the project.
Officials declined to disclose the total amount of the deal but said the rehab work, which will occur over the next 12 months, will be significant.
The team will upgrade the unit kitchens and bathrooms and provide significant exterior and site improvements, including key accessibility modifications. The community center will also be expanded to include a resident resource and activity area.
"The preservation of University Village is the centerpiece of this transaction,” said Bryon Gongaware, managing director of affordable housing at Security Properties. "Being able to substantially rehabilitate the property while preserving critical affordable housing for the long-term is a win for everyone involved. We are excited for the transformation at the property, which will be to the benefit of the residents and the community as a whole."
Evergreen Real Estate Services, which assumed on-site property management last year, will be instrumental in orchestrating operational efficiencies while effectively communicating with residents and the community.
Headquartered in Seattle, Security Properties is a national real estate investment, development, and operating company. The firm has acquired or developed over 80,000 residential units at a cost of over $4 billion.
 

Security Properties Acquires Affordable Las Vegas Asset for $27M

March 8,2017

IvyLee Rosario - Multi-Housing News
The portfolio offers two adjacent properties—Sunrise Palms, comprises 122 units of senior living, and Orchard Club, which provides 220 units of low-income housing.
Security Properties purchased Orchard Club, an affordable community located at 1220 Tree Line Drive in Las Vegas, for $27.2 million. Originally built in 2001, the community offers two adjacent properties—Sunrise Palms, which houses 122 units of senior living, and Orchard Club, which provides 220 units of low-income housing. Both properties were sold within the one transaction.
The community comprises one-, two- and three-bedroom floorplans ranging from 625 to 1,148 square feet. In-unit features include washer/dryers, vaulted ceilings, walk-in closets and private balcony/patios. Residents have access to a fitness center, business center, clubhouse, playground, barbecue picnic area, swimming pool and 320 parking spaces.
The property was developed using Low Income Housing Tax Credits and HOME funds from the Nevada Housing District. The affordable housing restrictions will remain in place for the next 15 years due to a regulatory agreement.
“Orchard Club is a strategic acquisition for Security Properties, as we are committed to growing our relationship with Nevada Housing Division in an effort to aggressively acquire, preserve and develop high-quality affordable housing throughout Las Vegas and Reno,” Bryon Gongaware, managing director of the Affordable Housing Group for Security Properties, told Multi-Housing News.
JLL Capital Markets provided the 15-year term fixed rat loan and utilized Fannie Mae’s Green Rewards program, which will provide funding for sustainable upgrades the company plans on implementing. The property will be managed by Madrona Ridge Residential, an affiliate of Security Properties.
 

SPARC Apartments Opens at Bellevue’s Innovative Spring District

February 20,2017

SPARC Apartments - GeekWire
Bellevue’s emerging Spring District is pioneering exciting changes on the eastside. Leading that charge is Sparc Apartments, a 309-unit, five-building community that opened its doors in February 2017. The Spring District is creating an international buzz reminiscent of the emergence of South Lake Union, and many have already sought out Sparc looking for a chance to be a part of its pioneering culture.
The Spring District has been designated an Innovation Zone where professional and personal passions collaborate, weaving an intellectual tapestry that drives new ideas – attracting companies like and REI and Microsoft; plus Global Innovation Exchange, a degree program from the University of Washington and China’s Tsinghua University. It’s a new, exciting and pioneering place to call home.
Right in the middle of the map – Sparc overlooks downtown Bellevue, where the best of urban and suburban coexist: from quiet walks on tree-lined streets to the bustle of downtown Bellevue for unmatched shopping and the latest restaurant opening. Minutes from I-405 and SR 520, Sparc is accessible to major eastside employers like Google, Microsoft, Expedia, Apptio and T-Mobile. Residents can enjoy the amenities of all five buildings: Take in the views from the roof deck in between shots on the putting green, get in a workout at the gym, or host a dinner party in the entertainment room. For the families at Sparc, Bright Horizons will be opening a 14,000 SF Early Education Center this spring and will share it’s playground with residents on the evenings and weekends. There is a sense of community, connection and activity at Sparc, surrounding a central and art-filled courtyard at the heart of it all.
Each building will showcase its own unique personality through design. There are numerous home feature combinations to suit individual preferences: from gas cooking, custom cabinetry and countertops, to oversized floor plans and unique color palettes, there’s something for everyone. Studio, one, two and even three bedroom homes are throughout Sparc.
Sparc welcomes the innovators – that spirit that leads people and places to great things. It’s a continuation of the life they lead everyday – they’re out making a difference, and are now living somewhere that embraces that mentality and is a reflection of who they are.
Leasing begins late February. For pricing and home reservations, contact the Leasing Office at 425- 454-7020 or schedule a tour online.
 

News Blogs Webcasts Press Releases Directory Videos Events Apartments Security Properties Acquires 267-Unit Apartment Community for $35.2 Million in Lakewood, Washington

February 14,2017

MultifamilyBiz.com
SEATTLE, WA - Security Properties purchased Beaumont Grand, a 267-unit, Class B multifamily property located in Lakewood, WA for $35,200,000. The property was originally developed in 1995 and consists of 23 two and three story residential buildings spread out over more than 11 acres.
Geographically, the city of Lakewood is situated just 9 miles south of Tacoma and less than two miles east of the Puget Sound. The property's strategic location also affords residents convenient access to two of the area's largest employers. Joint Base Lewis-McChord, the largest military base on the west coast, is located ~15 minutes south and supports a total of 66,000 jobs. Additionally, the 800-bed Western State Hospital employs roughly 2,100 and is located less than one mile west of the property.
Lakewood is a submarket that has strong job drivers, but very limited supply. Since 2002 only two properties, totaling 306 units, have been built in the area with no planned future apartment developments. This, combined with the significant rent growth currently being experienced in Seattle's first ring, is pushing people out of the core into markets like Lakewood where the rents are much more affordable.
One of the property's most unique features is its large units. At an average of 939 square feet, Beaumont's floor plans are by far the largest in its competitive set. Additionally, Beaumont Grand is one of only two gated communities in the area creating a higher-end feel.
Beaumont Grand represents a value-add investment with moderate interior and exterior renovation characteristics. Security Properties plans to renovate all units. The new spec will include black appliances, cabinet doors with modern pulls, upgraded lighting, paint and baseboard along with flooring.
In order to effectively reposition the asset, the current business plan also includes capital focused on the modernization of resident common areas and amenity spaces. Additional major projects include a roof replacement and full exterior paint.
According to Davis Vaughn, Director at Security Properties, the acquisition was made because, "this was a basis buy for us in a submarket with zero supply. We believe in JBLM long term and like opportunities where we can come in significantly below replacement cost. With a low basis and value-add upside, we expect this acquisition to outperform the overall market and create value for our investors."
The property will be managed by Security Properties-affiliate Madrona Ridge Residential
 

Seattle developers have big plans for Portland site

February 6,2017

Brian Miller - Staff Reporter - Seattle Daily Journal of Commerce
Urban Renaissance Group and Security Properties announced the $20 million acquisition of a Portland site for a mixed-use project to be called the Press Blocks.
Formerly occupied by The Oregonian's printing plant, the one and one-half block site at 817 S.W. 17th Ave. is located in the Goose Hollow neighborhood in southwest Portland, next to the Providence Park soccer stadium.
The Oregonian's parent company sold the property. Demolition is expected to begin late this year.
Three structures are planned. Portland's GBD Architects will design an eight-story office building with 150,000 square feet and 100 underground parking spaces.
Mithun will design a 23-story apartment tower with 337 units and 245 underground parking spaces; and a three-story mixed-use pavilion building with 41,000 square feet. The two garages will be connected by a tunnel. The site also has a streetcar station nearby.
The Press Blocks are slated for completion in 2020. The total project cost wasn't announced. URG will develop the office building. Security Properties will develop the apartment tower and small pavilion building.
In 2014, URG and Clarion Partners paid $14.5 million for The Oregonian's headquarters building, then converted it into office space. URG now owns or manages 1.5 million square feet in Portland.
In a statement, URG founder Patrick Callahan said, “This investment expands our Portland presence significantly, and is our largest development project to date in the city.”
Security Properties' John Marasco said, “Our development strategy has been to be very urban and in particular, proximate to multimodal transit nodes. We have been looking for development opportunities in Goose Hollow for the last several years, and when the opportunity came up to partner with URG and become a part of this significant transformative development, we jumped on it!”
 

WEEKLY ROUNDUP: PRESS BLOCKS, VISTA PEARL, SWIFT HEADQUARTERS, AND MORE

February 5,2017

nextportland
Image of the Press Blocks development in Goose Hollow, from the project’s second Design Advice Request hearing in October 2016 (image by Mithun)
According to the Portland Business Journal the sale of the former Oregonian printing facilities in Goose Hollow has closed. Urban Renaissance Group and Security Properties paid $20 million for the site, which is set to be redevelopment as the Press Blocks.
The Business Tribune wrote about the new leadership at Holst Architecture.
After more than 20 years, Mark Edlen has handed over the reins at Gerding Edlen, reports the Portland Business Journal.
The NW Examiner reported that the amount of ground retail at the Vista Pearl (formerly Block 20) will be reduced from what was originally approved.
The Portland Bureau of Transportation is looking for feedback on what type of bike parking should be required at new apartment buildings, reported BikePortland.
The DJC wrote about how local architecture firms make decisions on whether to speak up on political issues.*
The prospect of lower corporate taxes under President Trump is having a chilling effect on one of the main sources of financing for affordable housing developments, wrote the Portland Mercury. Local projects affected include Innovate Housing’s NW 14th & Raleigh development, which now has a $1.8 million funding gap.
The Portland Business Journal took a look at the Swift Headquarters, completed last year in the former Rose City Awnings building in NW.
As part of their Architect’s Questionnaire series, Portland Architecture interviewed Nat Slayton of ZGF Architects.

 

2016

 

Franklin's The Artessa luxury apartments sold for $57.5 million

December 10, 2016

Getahn Ward - Growth and Development Reporter - The Tennessean

A Seattle-based real estate investment, development and operating company has paid $57.5 million for the 250-unit Artessa luxury apartment community in Cool Springs.
The acquisition is the third in metro Nashville this year for Security Properties, which an institutional investor joined in buying the community at 1034 Windcross Court in Franklin.
The deal is also one of the Nashville area's biggest multifamily investment sales this year. In May, Irvine, Calif.-based investor Steadfast Income REIT Inc. paid $110 million for 724-unit The Landings of Brentwood to set a new record total dollar price paid for a multifamily asset in the Nashville region.
Security Properties' CEO David Dufenhorst said purchase of The Artessa reflects his company's commitment to metro Nashville. In April, the company acquired the Music Row-area Note 16 and the Centennial Park-area Opus 29 apartment communities in Nashville.
The Artessa was completed in January and is nearly 90 percent occupied.
"We are seeking locations that will provide durable cash flow and strong yields," Dufenhorst said.
"With the great Nashville economy largely driven by recession-resistant health care and education sectors, Williamson County having an extremely tight office market and The Artessa having an advantageous competitive position in its submarket, we expect this acquisition to perform well over a long hold period.
The Artessa features high-end unit interiors and luxurious common areas. Security Properties said it intends to improve the common areas by adding an additional BBQ area, installing LED lighting, expanding the business center, adding a sports lounge and executing on other smaller projects.
Brokers Russ Oldham, Steve Massey and Brett Kingman of CBRE in Nashville represented The Artessa's seller in the transaction.
 

Jackson Square Properties Buys Kent Apartment Asset for $56.5MM

December 8, 2016

(EDITOR’S NOTE: San Francisco-based Jackson Square Properties purchased the asset for $56,539,200, or approximately $186,000 per unit, accoridng to public records. The sale closed on December 1, 2016. The Admiral Capital Group and Security Properties joint venture purchased the asset in February of 2015 for $40,050,000, or approximately $132,000 per unit.)
New York – Admiral Capital Group and Security Properties today announced the successful sale of Waters Edge Apartments, a 304-unit multifamily property located in Kent, Washington, in the Seattle MSA on November 30, 2016.
Admiral and Security Properties acquired the apartment community in February 2015 through a joint venture. The investment provided an opportunity to purchase a well-located asset in the fourth largest manufacturing and distribution center market in the United States at a discount to replacement cost. During its ownership, the joint venture repositioned the property by curing deferred maintenance, enhancing the exterior and upgrading unit interiors. Select exterior improvements included re-siding the entire property, replacing wooden decks and installing a new playground amenity. Interior renovations included modernizing kitchen cabinets, appliances and flooring and renovating bathrooms. Overall, the upgrades repositioned the property to compete with higher quality assets with higher overall rents.
“Our strategy is to identify capital-deprived assets in markets with a supply and demand imbalance,” said Dan Bassichis, Co-Founder of Admiral Capital Group. “Waters Edge was an ideal fit and provided the opportunity for our partnership to invest the necessary capital to improve the property and experience for the residents and capture a share of the growing demand and rent growth in the submarket.”
“Waters Edge is representative of the opportunities we like to target. By executing an extensive renovation plan, including a complete re-side, the partnership was able to enhance the asset’s physical condition to accurately align with its submarket-leading location,” said Barrett Sigmund, Senior Director of Investments at Security Properties.
“The investment in Waters Edge was the continuation of a long-term relationship with SPI,” said Jarett Kaplus, Principal at Admiral. “We continue to proactively seek additional value-add multifamily investments nationwide, including in the Pacific Northwest.”
Philip Assouad and Giovanni Napoli, commercial real estate brokers with Kidder Mathews, handled the Waters Edge sale.
The sale represents the ninth realization for Admiral in its first value-add real estate fund, Admiral Capital Real Estate Fund, L.P. (“ACRE I”). To date, Admiral has invested in 14 assets with an aggregate purchase price of over $370 million and continues to actively pursue value-add opportunities in top 25 MSA’s.
About Admiral Capital Group
Admiral Capital Group (“Admiral”) is a real estate and private equity investment firm with offices in New York, San Antonio and Seattle. Admiral was co-founded by David Robinson, US Naval Academy graduate, philanthropist and NBA Hall of Famer, and Daniel Bassichis, formerly of Goldman Sachs. Admiral Primarily invests in real estate through a partnership with USAA Real Estate Company and targets value-add opportunities in office, multifamily, hotel and retail properties. Admiral has acquired over $500 million of real estate assets since 2008. Admiral’s founders also have pledged 10% of their profits to philanthropic causes in certain areas where Admiral invests, building on Robinson’s lifetime commitment to support education and lower-income communities. For more information, visit www.admiralcg.com.
About Security Properties
Security Properties is a national real estate investment and operating company headquartered in Seattle, Washington. For more than 47 years, Security Properties has provided quality housing to its residents, as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 80,000 residential units at a cost of over $4 billion. Security Properties maintains a focused multi-family strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists. For more information, visit www.securityproperties.com.
 

Huge Bellevue neighborhood continues to grow

November 28,2016

Kipp Robertson - Reporter - Mynorthwest.com
The 36-acre Spring District neighborhood is coming together.
Security Properties began construction on its second phase of mixed-use development last week.
The latest phase of construction will include three buildings that will consist of 279 residential units and two ground floor commercial spaces.
“For a number of years, the Spring District was merely a conceptual neighborhood fashioned after Portland’s renowned Pearl District,” said John Marasco, Security Properties’ chief development officer. “With new residential, retail and office projects on the way, including anchors Global Innovation Exchange and REI, together with the rapidly advancing Sound Transit East Link we’re seeing the long-awaited Spring District take shape and we couldn’t be happier to be a part of it.”
The first phase of the Spring District includes five buildings totaling 309 residences and 15,000-square-feet of commercial space. Two of those buildings are expected to be completed February 2017. All five buildings — known as the Sparc Apartments — will be open to residents in June 2017.
Security Properties anticipates a 24-month timeline for construction on the second phase.
REI to relocate headquarters to Spring District
Outdoor co-op REI announced that it has finalized an agreement to relocate its headquarters to the Spring District.
“We aspire to create something unexpected that embodies our co-op values. We’re envisioning a sustainable, transit-friendly, urban neighborhood that blends working space with green space, takes inspiration from the community around it, and connects to the rest of the Puget Sound area,” said Eric Artz, REI’s executive vice president and chief operating officer. “After 28 years in Kent, we have outgrown our current headquarters. So, we will build a campus as a gathering place that fosters creativity and connects thousands of increasingly mobile employees.”
REI will develop eight acres of land between SR 520 and Bel-Red Road.
Plans call for REI to relocate by 2020.
One of the benefits REI sees in the Spring District is the access to better mobility now and in the future. That includes a light rail station planned to open in the area.
Work began on the Spring District in 2014. Construction on the first phase of the neighborhood broke ground in June 2015. It is a 36-acre mixed-use urban neighborhood near the intersection of SR 520 and I-405. It will ultimately feature commercial, residential and retail including hotels, restaurants, and shops.
The $2.3 billion project is one of the largest urban development projects on the West Coast. Work is being done in phases, with the eastern and southernmost blocks developed in Phase One. Development will eventually move north towards the future East Link rail station.
 

Security Properties starts another 279 apartments in the Spring District

November 23,2016

Brian Miller - Journal Staff Reporter - Daily Journal of Commerce
With its Sparc apartments well underway in Bellevue's new Spring District, Security Properties broke ground this week on a second mixed-use complex there.
This one has no name yet, but it will have a total of 279 units in a nine-story building and two six-story buildings. About 3,700 square feet of commercial space are planned with two levels of underground parking for 255 cars. The size is about 367,000 square feet.
In a statement, Security Properties' John Marasco said, “With new residential, retail and office projects on the way, including anchors Global Innovation Exchange and REI, together with the rapidly advancing Sound Transit East Link, we're seeing the long-awaited Spring District take shape, and we couldn't be happier to be a part of it.”
Mithun designed the project, which is scheduled for completion in late 2018.
Units will range from studios to three-bedroom apartments. Rooftop decks, a fitness center, pet salon and bicycle maintenance/storage areas are planned.
Security Properties' team also includes equity partner HAL Real Estate, financial partner Pacific Life Insurance Co., general contractor Walsh Construction and structural engineer Swenson Say Faget.
The 1.8-acre site is just east of Sparc. Both projects are at the south end of the Spring District, along Northeast 12th Street, between 120th and 124th avenues Northeast.
The five buildings in Sparc range from three to nine stories, and will contain 309 residential units and 14,000 square feet of commercial space. GGLO is the architect for the 2.5-acre project. Sparc's first two buildings are set to open next February with 79 units.
The 36-acre, $2.3 billion Spring District is being developed by Wright Runstad and Shorenstein Properties. The new neighborhood will be centered on a light-rail station scheduled to open in 2023.
AMLI Residential also is planning 220 units on 1.5 acres, with a possible start date next year. REI is expected to occupy eight acres there when it moves its headquarters from Kent in 2020.
 

Security Properties breaks ground on new apartments in Bellevue’s Spring District

November 23,2016

Sam Keeley - Seattlecurbed.com
Security Properties has begun construction on the second phase of it’s mixed-use residential development in Bellevue’s 36-acre Spring District neighborhood.
Located nearby Phase I (otherwise known as Sparc Apartments), this phase consists of three buildings with 279 residential units. They’ll be a mix of studio, one-, two- and three-bedroom apartments above two ground-floor commercial spaces totaling 3,700 square feet. Building amenities are expected to include rooftop decks, a large fitness facility, a pet salon, and common areas.
Security Properties foresees a 24-month construction timeline and the project will be built to LEED and Built Smart program standards. Mithun is the architect and Walsh Construction is the general contractor.
Sparc Apartments was a larger, five building project that totaling 309 residences and 15,000 sf of commercial space. Two of those buildings are expected to be completed on February 2017 and pre-leasing will begin early next year. All five Sparc buildings will open to new residents in June 2017.
The 36-acre, $2.3 billion Spring District is being developed around the impending light-rail station that’s scheduled to open there in 2023. By that time, companies such as REI will have joined the many residential developments planned. Both phases of Security Properties’ complexes are along Northeast 12th Street, between 120th and 124th avenues Northeast.
 

Sculpture offers bit of whimsy in Seattle neighborhood

November 4,2016

Ken Lambert - Staff Photographer - The Seattle Times
“Perseus II,” a 3,000-pound, 33-foot-high sculpture, is installed outside the Janus Apartments in Greenwood.
 

Perseus II: A new icon for the Greenwood neighborhood

November 4,2016

Seattle Daily Journal of Commerce
Today, Seattle artist Miguel Edwards’ new moving 30-foot-tall kinetic sculpture is being installed at the corner of Northwest 85th Street and First Avenue West, in the Greenwood neighborhood. Dubbed ‘Perseus II,’ the sculpture is situated just east of the new 105-unit Janus Apartments building, Seattle-based developer Security Properties commissioned the artwork as part of its commitment to enhancing each new project and neighborhood with unique and local artwork. About “Perseus II”
Solar panels built into the artwork will supply all the electricity needed to move the pendulum and power the light.
The sculpture is composed of a steel tripod base with a curved center pendulum. A slow kinetic rotation is created by the pendulum which is weighted at the top by a stainless sphere and at the bottom by a stainless cone. Solar‐powered LEDs will illuminate two tiers of glass spheres and fins. All glass elements will be set aglow either internally or by adjacent LED lights.
About the artist
Miguel Edwards has lived in the Ballard-Greenwood area for about a decade and has had several exhibitions featured in local galleries as part of the Greenwood Art Walk.
According to Edwards, “Perseus II” draws on references to mythology and duality: exploring man’s relationship with things beyond his physical grasp.
For this project, Security Properties was particularly compelled by artist Miguel Edward’s vision of “Perseus II” due to its potential to become an icon for the neighborhood. The aim is for all Greenwood residents to feel ownership of the sculpture and for Seattleites to someday associate it with Greenwood. The sculpture is also intended to boost a sense of pedestrian safety and walkability along First Avenue and 85th Street.
To Carkeek Park regulars, the sight of Perseus II may invoke a sense of déjà vu. The installation’s younger and smaller sibling, “Perseus I” was temporarily installed near Carkeek Park’s playground in 2010 as part a Center on Contemporary Arts exhibit.
About Janus Apartments
Janus is the Roman god of gates, transitions, and new beginnings. He was depicted as having two faces: one facing the past, and one facing the future. To Security Properties, this aligned nicely with the Janus Apartments site and the building. The building itself has two faces, one facing single-family homes to the south, and one facing 85th Street to the north, each with a distinct façade. The site can be seen as a sort of gateway between the neighborhood and the commercial core.
The building seeks to honor the transition that Greenwood is experiencing, paying homage to its past while celebrating its present and future. The name Janus stuck immediately and has driven much of the team’s design and art decisions.
City living is full of options – always growing and changing. Janus Apartments is part of the artful and eclectic neighborhood of Greenwood, just 10 minutes north of downtown Seattle. “Perseus II” serves as a constant reminder of life in motion.
 

Lake Oswego apartments go for $78M

October 17,2016

Jon Bell - Staff Reporter - Portland Business Journal
Three years ago, the One Jefferson apartment complex in Lake Oswego sold to San Francisco's Friedkin Realty Group and Jackson Square for $63 million.
Three years later, the same apartments have sold for $78 million, this time to Seattle's Security Properties and the California-based Pacific Life Insurance Company.
The partners announced the deal in a release today. Jon Hallgrimson, Eli Hanacek and Josh McDonald of the CBRE Capital Markets Pacific Northwest Institutional Properties team represented both the seller and the buyer. Nick Santangelo of CBRE’s Debt & Structured Finance organized the financing for the acquisition.
The 347-unit complex was built in 1987 and 1990. Security Properties plans to renovate the unit interiors and improve amenity areas and aesthetics.
"This deal epitomizes what we look for in value-add projects," said Barrett Sigmund, a senior director at Security Properties. "Lake Oswego boasts some of the best schools, demographics and proximity to jobs of any suburban Portland submarket. Additionally, given the barriers to entry and limited future supply, there should be little new product in the submarket for the foreseeable future. This dynamic allows us to reposition the property and provide residents a best-in-class physical asset on par with the A+ location."
Madrona Ridge Residential, an affiliate of Security Properties, will manage the property.
 

Security Properties Acquires 432-Unit Arches at Hidden Creek Apartments in Chandler, Arizona

September 15,2016

MultifamilyBiz.com
CHANDLER, AZ - Security Properties purchased Arches at Hidden Creek, a 432-unit multifamily property located in Chandler, AZ for $55 million. Security Properties now own five assets in the Phoenix marketplace.
Arches at Hidden Creek is located within the dynamic Chandler submarket. Chandler's median annual household income is approximately $71,000, 32% higher than Maricopa County, which covers most of the Phoenix MSA. Chandler's greatest strength is its employment base. Arches sits within five miles of 70,000 jobs in industries that include high-tech manufacturing, aerospace, bioscience, and advanced business services. Because of the city's central location and proximity to three freeways, it can pull from more than 1.7 million people within a 30-minute commute. The Price Road Corridor is the area's largest and most established employment center. Silicon Desert, as it is known, is located just one mile southwest of Arches.
The property is also within close proximity to the ASU Research Park (15,000 jobs), Arizona Avenue Business Parks (20,000 jobs), Downtown Chandler (5,000 jobs) and the Chandler Airpark (5,000 jobs). Less than 3 miles directly to the west of Arches lies the Chandler Fashion Center, an upscale, super-regional mall that encompasses over 180 stores and roughly 1.2M SF. The mall is widely considered the premier shopping destination in metropolitan Phoenix's Southeast Valley and is anchored by Nordstrom, Dillard's, Macy's and Sears.

 

Arches at Hidden Creek is a garden-style apartment community that was constructed in 1986.
The business plan is a moderate value-add. To date, 133 units have been upgraded throughout the property. Interior upgrades include: faux wood flooring, baseboards, black appliances, faux granite countertops, new cabinet fronts with hardware and painted cabinet boxes to match, light fixtures, two-tone paint, ceiling fans and updated hardware and plumbing fixtures. SP plans to continue this rehab strategy by renovating the remaining 299 original units to a similar interior scope.
According to Davis Vaughn, Director at Security Properties, the acquisition was made because, "Arches at Hidden Creek offers everything we look for in an investment. The Chandler job story is one of the best in all of Phoenix plus the location gives residents easy access to retail and enrollment in the top-rated Chandler school district. With a basis well below replacement cost, we expect to produce outstanding risk-adjusted returns to our investors with this purchase."
The property will be managed by Security Properties-affiliate Madrona Ridge Residential.
 

Security Properties Acquires Avanti Apartments

June 29,2016

David Phillips - GlobeSt.com
LAS VEGAS—Security Properties has purchased Avanti Apartments, a 414-unit, class A multifamily property located in Las Vegas for $57.5 million. It is the Seattle-based firm’s fourth purchase in the Las Vegas market.
Avanti Apartments was built in 2010 and the units feature nine-foot ceilings with decorative crown molding, faux wood-style flooring, GE steel appliance package, large walk-in closets, garden-style tubs and stackable washer/dryers. Additionally, Avanti offers a complete amenity package including a resort-style pool with spa and cabanas, state-of-the-art fitness center, fireside lounges and picnic areas with barbecues. Security Properties will execute a light renovation of the unit interiors.
The property is ideally located along the Bruce Woodbury Beltway in northwest Las Vegas. The area currently has the lowest vacancy of the six Vegas submarkets at 4.63% per CBRE. The low vacancy, combined with the very limited recent and planned supply, results in strong rent growth forecasts in the area for the foreseeable future. The area is also home to a number of the market’s premier public and charter schools. Within just a four-mile radius of the property are three public elementary schools, two public middle schools, one public high school as well as two private charter schools.
The property is also near Interstate 215, providing residents quick access to both major retail and employment corridors. The Clark County Department of Public Works is currently underway with a construction project that will add two additional exchange areas as well as three overpass structures. The project is focused along a 2-mile strip of I-215 directly adjacent to Avanti and will result in increased accessibility to both the property as well as area retail and employment corridors.
Davis Vaughn, investment manager at Security Properties says the company acquired this asset because, “Avanti was a great opportunity for us to buy a core-plus asset in a dynamic location well below replacement cost. The recent and future expansion of the Providence and Skye Canyon master planned communities should strengthen the fundamentals of this area long term which will create value for our investors over the hold.”
The property will be managed by Security Properties-affiliate Madrona Ridge Residential.
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle. Since its founding more than 45 years ago, Security Properties has acquired or developed over 66,500 residential units at a cost of over $3.35 billion.

 

 

At $9,350 a month, this apartment is far from the region’s most expensive

June 21,2016

Marc Stiles - Staff Writer - Puget Sound Business Journal
Ten years ago the chatter in Seattle was about who had the most expensive condo. Today it's about who's got swankiest apartment.
There's a new luxury entry on Seattle's First Hill with the re-opening of the Panorama, where they're asking around $9,350 a month for four penthouses at the top of the 18-story building.
The $19 million, year-long renovation of the Panorama – a 1962 World's Fair-era tower at 1100 University St. – is done, and more than two-thirds of the 179 units have been leased. Rents start at $2,672 for a one-bedroom with up two months' free rent.
The owner of the Panorama, Security Properties of Seattle, thinks the the nearly 2,400-square-foot penthouses will appeal to successful entrepreneurs, professional entertainers and athletes and the doctors who work at nearby hospitals.
A couple rented the first penthouse, according to Security Properties CEO David Dufenhorst. He said the they are business owners and moved from the Martin in Belltown, where rent for an 1,820-square-foot penthouse is $8,000 a month, according to the property's website.
Security Properties acquired the Panorama in 2014 for $74 million. At the time, apartments were leasing at well below market rates. A two-bedroom, for instance, was available for $1,525. Two-bedrooms now start at $3,055.
Security built the marketing of Panorama around the property's 1960s style. The Panorama website urges would-be tenants to "reclaim your inner Don Draper," the lead character of the hit TV series "Mad Men." Panorama offers "a world of difference that brings mid-century style to fully remodeled homes." Marble windowsills and floor thresholds are holdovers from the old Panorama, and cabinet doorknobs and other hardware, while new, are inspired by the '60s. Clark Design Group was the architect of record for the renovation.
Apartments at the Panorama are larger than new-construction units. Security Properties was going to break them up into smaller residences, but company officials said they quickly realized that the bigger size would differentiate the property from the competition. The Panorama has 37 three-bedroom units, the most of any downtown Seattle building, according to Security Properties.
The penthouses at Panorama are far from the most expensive in the region. In downtown Seattle, a penthouse at the historic Cobb Building measures around 2,275 square feet and goes for $13,150 a month, said a source who asked not to be named.
Unofficially, the most expensive penthouses are in downtown Bellevue. This spring, the owner of a 4,058-square-foot condo atop One Lincoln Tower was looking to rent out the home for $20,000 a month. It was not clear Tuesday whether that apartment is still available.
At $20,000, it's still less expensive than up the street at the Bravern Signature Residences, where according to a leasing agent they're asking $25,000 for a nearly 5,900-square-foot penthouse.
 

Major rehab includes a Tiki lounge for 1960s-era First Hill apartments

June 9,2016

Journal Staff - Daily Journal of Commerce
Security Properties has opened Panorama Apartments after a year-long renovation of the 18-story, 179-unit complex on First Hill.
Security bought the 1962 building at 1100 University St. in September 2014. It paid $73.98 million for what was then called Panorama House.
In a statement, the Seattle-based firm said it had envisioned turning the large apartments into smaller units, but decided that having large units would differentiate the building in this market.
Security said 68 percent of the units are leased.
There are one-, two- and three-bedroom apartments as well as penthouses. Most units have 175-square-foot patios.
The website says 860-square-foot one bedrooms are available starting at $2,672, and 1,383-square-foot three-bedrooms that start at $4,670. Some units come with up to two months free rent.
Units have parquet flooring, open-concept kitchens, built-in wine chillers, and washers and dryers. They also have marble windowsills and thresholds — holdovers from the original units — as well as quartz countertops, undermount sinks, and new cabinets in kitchens and bathrooms.
There are four three-bedroom, two-bathroom penthouses that range from 2,301 to 2,462 square feet. Security said these are some of the largest penthouses for rent in a Seattle high-rise.
Penthouses come with pantries and wood-burning fireplaces. Two have inner-facing courtyards. Rents are not listed.
Security said before the renovation, one of the penthouses was dubbed “the pink unit” for its pink tile, pink wallpaper and pink terrazzo floor.
Panorama Apartments amenities include a pool deck and entertainment area, bocce court, shuffleboard court, outdoor kitchen, seating, fire pit and a Tiki-themed lounge. There's also a fitness center, game lounge, bike storage and repair center, and a pet salon.
A clubhouse near the entrance has a kitchen, seating, conference room and patio.
There's parking for each apartment and additional spaces in an overflow lot.
Security Properties replaced the original electrical system, installed high-speed fiber networking, and added washers and dryers.
Madrona Ridge Residential is the property manager and Clark Design Group was the architect of record for the renovation.
 

Security Properties Acquires Lakemont Multifamily

June 1,2016

David Phillips - GlobeSt.com
BELLEVUE, WA—Security Properties and Pacific Life Insurance Company have purchased Overlook at Lakemont, a 400-unit, class B multifamily property located here, for $118 million. The May 25 deal was Security Properties’ first joint venture with Pacific Life. Overlook is located in the prestigious Lakemont community where the average home price is nearly $900,000 and the average income within three miles of the subject property is $130,000. Lakemont is part of the Issaquah School District which is repeatedly ranked as one of the top districts in the state.
“This was a rare opportunity for us to buy in one of the best residential neighborhoods in the Seattle metro, “said Davis Vaughn, investment manager at Security Properties. “The quick I-90 access provides convenient commuting to some of the top employers in our region and the area demographics are outstanding. We think our renovation program will absolutely transform the asset and provide the high quality product that Lakemont expects.”
The location has a low density, suburban feel, the buyers say, but offers walkable retail including Starbucks and a high end local grocery store, Town and Country. To the northeast of the subject is Lakemont Park and to the southwest is Lewis Creek Park. Major employers that operate their corporate headquarters within six miles of Overlook include Microsoft, Costco, Expedia, T-Mobile, Paccar and Puget Sound Energy.
The apartment complex was built in 1992 and, with a few exceptions, is in original condition. The business plan is to renovate all of the units as well as update the clubhouse, replace the roof, re-side the property, and paint the exterior.
“The end result will be a core asset in an A+ location,” Vaughn added. “This is the only property in Bellevue of over 250 units built in the 90′s so it does not have some of the functional obsolescence of 80′s construction product, but it has an in-fill location that is irreplaceable.”
The property will be managed by Security Properties-affiliate Madrona Ridge Residential.
Overlook at Lakemont was purchased from Heitman. The sale was led by Jeff Williams, Chris Ross and Tim Brown of Moran & Company.
 

Security Properties Teamed With College on Nashville Apartment Buys; Gets Loan from Guardian Life

April 22,2016

Commercial Real Estate Direct Staff Report - Commercial RealEstate Direct
Security Properties, which paid $53.7 million for a pair of Nashville, Tenn., apartment properties, invested in them in a venture with Loma Linda University's endowment.
The venture paid $34.4 million, or $247,482/unit, for the 139-unit Opus 29 at 301 29th Ave. North, and $19.33 million, or 224,767/unit, for the 86-unit Note 16 at 1226 16th Ave. South.
The properties were purchased from their developer, Stonehenge Real Estate Group of Nashville. Loma Linda, a southern California university with a focus on the health sciences, also had invested in their development through its $440 million endowment.
The Security Properties/Loma Linda venture funded its purchase in part with a $32.2 million mortgage with a 10-year term from Guardian Life Insurance Co. of America.
Opus 29 is in Nashville's West End neighborhood, two blocks west of Vanderbilt University and Medical Center. It is 97 percent occupied, with monthly rents from $1,330 to $2,523/unit. The property includes a swimming pool, fitness and business centers and a coffee bar.
The Note 16 property is in the city's Music Row area, near the east side of the Vanderbilt campus. It is 95 percent occupied, with monthly rents from $1,220 to $2,745/unit. The property has a courtyard and grilling area, business and fitness centers.
Security Properties, a Seattle developer, owns interests in 108 assets with nearly 16,000 multifamily housing units. Most of its holdings are in the Seattle and Portland, Ore., areas. It's targeting Nashville because of its appeal to millennials and to the city's reliance on the education and healthcare sectors, which historically have been relatively recession-resistant.
The Loma Linda endowment fund also owns apartment properties in Peoria, Ariz.; San Antonio, Tex.; and Richmond, Tex. Last month, a venture of Security Properties, Loma Linda University and Sunroad Enterprises acquired an apartment complex in Reno, Nev.
 

REI to move headquarters to the Spring District in Bellevue

March 29,2016

Marc Stiles - Staff Writer - Puget Sound Business Journal
Recreational Equipment Inc. (REI) on Tuesday said it is moving its headquarters from Kent to Bellevue.
The 77-year-old outdoor gear cooperative said it has signed a non-binding letter of intent to develop eight acres of land in the Spring District of Bellevue, a 36-acre development east of downtown.
"If all goes as planned, we aim to move in by 2020," REI said in a statement.
The co-op does not have a formal deal, according to the statement, but is "confident in the process."
In an email to employees, the company said that by the end of the summer, it will know either that we're moving forward with the Spring District plan, or that it will continue to search for a headquarters space.
The Spring District will have a light-rail station, and it's part of the Mountains to Sound Greenway – two attributes that are important to the culture of REI.
The company said it is "looking to create a hub for employees to come together to dream and scheme about life outdoors. The Spring District gives us the opportunity to create a unique space for the co-op, where our employees can gather and share our love for the outdoors."
The Spring District light-rail station is scheduled to open in 2023 as part of East Link, a $3.7 billion, 14-mile light rail extension from Seattle to Redmond's Overlake area.
REI owns its campus in Kent, where it has around 1,100 employees, making it the suburban city's second largest private employer behind Boeing.
A Seattle real estate company, Wright Runstand, is developing the $2.3 billion Spring District in a former warehouse district.
 

UNDER CONSTRUCTION: PEARL BLOCK 136

March 25,2016

nextportland.com
Construction has begun on Pearl Block 136, which will be located on the site of the former PNCA Goodman building. The project consists of two buildings separated by a publicly accessible courtyard: a 5 story office building facing NW 13th Ave; and a 15 story residential tower facing NW 12th Ave. Underground parking for both buildings will be accessed from NW 12th Ave, with 211 vehicular parking spaces and 332 long term bicycle parking spaces. The design of the project is by Seattle based architects Mithun, for developer Security Properties.
The project site is at NW 13th & Johnson in the Pearl District. The site was formerly home to the Pacific Northwest College of Art’s main campus building, which was demolished in the second half of 2015. The College sold the building to Security Properties in 2013 for $11.75 million, which helped pay for their move into the 511 Building.
Early meetings between the project team and the Pearl District Neighborhood Association resulted in three requests from the neighborhood: that the project include publicly accessible open space at the same level as the street; that the height be kept low on NW 13th Ave in deference to the nearby 13th Avenue Historic District; and that the developer include office space to make up for the loss of daytime activity formerly provided by PNCA. The first two requests were major drivers of the final design: a 76′ tall building on NW 13th Ave and a 148’-4” building on NW 12th Ave, separated by a courtyard.
Though Security Properties typically develops residential projects, they decided to incorporate 60,000 sq ft of office space into the NW 13th Ave building in response to the third request by the neighborhood. The brick clad building will also contain 15,000 sq of double sided retail, which will spill out onto raised docks at both 13th Ave and the courtyard. At the top of the building will be a roof terrace and ecoroof plantings.
The taller of the two buildings will be just shy of the maximum 150′ allowed height. The primary materials proposed are window wall and aluminum composite panels. The tower will contains 208 residential units, including double height townhouses with entries directly onto NW 12th Ave and NW Johnson St. The 15th floor will have 6 penthouses with private terraces. A rooftop terrace will be provided, with community gardens for the residents.
 

Security Properties and JLL Preserve Affordable Housing Property: The team secures $25 million in new Bridge-to-Resyndication financing

March 16,2016

Donna Kimura - Deputy Editor - Affordable Housing Finance JLL Capital Markets officials announced the firm has secured a $25 million Freddie Mac Bridge-to-Resyndication loan for Security Properties to acquire and rehabilitate Heatherstone Apartments, an existing 455-unit affordable housing property located in Kennewick, Wash.
Security Properties simultaneously executed a rate lock on a $34 million Freddie Mac Tax-Exempt Loan (TEL), featuring a 30-month forward-rate lock term.
“The bridge loan, combined with the forward-rate lock TEL, allowed Security Properties to quickly and efficiently acquire much-needed existing affordable housing stock and to cement plans for the preservation and rehabilitation of the affordable housing stock 30 months from now,” said Tim Leonhard, JLL managing director. “Freddie Mac’s new Bridge-to-Resyndication program, which JLL helped develop last fall, is playing a major role in the preservation of affordable housing by allowing dedicated affordable housing developers to compete with traditional cash-on-cash buyers to quickly acquire existing affordable housing stock while eliminating interest rate risk on a future preservation transaction at the time of initial acquisition. We see significant runway and increased demand ahead for this loan product.”
The bridge loan features an 82.5% loan-to-value ratio and has a three-year, interest-only term, and an initial rate of 2.87%. The TEL loan features a fixed rate of 4.63% on a 17-year term, with two years of interest-only followed by a 35-year amortization schedule.
“The preservation of Heatherstone Apartments is at the core of our mission,” said Bryon Gongaware, manager director of affordable housing at Security Properties. “This transaction presented several challenges: With the TEL, we were able to close quickly and compete with conventional buyers, and forward-rate lock the tax-exempt bonds, mitigating a key risk in the transaction. With this financing, Security Properties has a well-defined plan to execute a significant renovation to the property that will improve the apartment community and preserve housing affordability for the long term.”
Additionally, the TEL interest rate lock offered the flexibility of a 10% downward resizing without penalty, should certain loan sizing assumptions change between the time of initial closing and the closing of the TEL. The borrower also has the ability to increase the TEL amount at final closing at a blended rate should income exceed the amount underwritten at initial closing.
JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. It recently acquired Oak Grove Capital.
Security Properties is a national real estate investment, development, and operating company headquartered in Seattle.
 

188-unit DuPont community sold to Seattle real estate firm

March 3,2016

Emily Parkhurst - Digital Managing Editor - Puget Sound Business Journal
The Clock Tower Village in DuPont has sold to a Seattle real estate firm.
Security Properties bought the 188-unit property for $30 million, the company announced Thursday.
The community is near Joint Base Lewis McChord, which is one of the state's largest employers. DuPont is also where Amazon has a huge fulfillment center and State Farm's operations campus is located.
Security Properties is currently developing a two-phase project in Bellevue's new Spring District. The latest phase of the project includes 279 new apartments. The $2.3 billion Spring District project, is modeled after Portland's Pearl District and includes access to rapid transit. A new technology graduate program will be located there.
Security Properties lists the Puget Sound region as one of its target markets, where it owns the 344-unit Millington at Merrill Creek and Everett, 252-unit Terra Heights in Tacoma and the 179-unit Panorama in Seattle.
Security Properties affiliate Madrona Ridge Residential will manage the property.
 

Nevada Real Estate News: Joint Venture Between Security Properties and New York Life Real Estate Investors Acquires Black Mountain Villas Apartments in Henderson

February 1, 2016

Staff Reporter - Realty Today
Black Mountain Villas, a 296-unit, multi-family property located in Henderson, Nevada was recently acquired by Security Properties through its Security Properties Multi-family Fund III in its second joint venture with New York Life Real Estate Investors.
"We feel that townhome product is undersupplied in Henderson on the rental side. New rental construction features primarily one and two bedroom units while the for-sale side usually builds the bigger units, but often with minimal amenities," said Davis Vaughn, Investment Manager of Security Properties. "By updating the interiors and amenities, we plan to offer the amenities typical of newer multi-family developments in a property with larger units. Once the renovation is complete, this asset will offer distinctive condo-style unit types, but with the convenience and flexibility of renting. We look forward to creating value for our investors with this acquisition."
According to the press release of Security Properties in PR News Wire, the Black Mountain Villas Apartments was built in three phases between 2001 and 2006. All the 296 units of the multi-family property feature three bedrooms, two-and-a-half bathrooms, and two-car direct access garages. The said property was originally built as a condominium-type building. As a result, all units offer a two-storey townhome style, with large floor plans and garages that are very rare in the area.
Extensive upgrades and renovations such as updates in the interiors of all units are being planned in order for the Black Mountain Villas Apartments to compete directly with Class A multi-family properties in the area.
Madrona Ridge Residential, an affiliate of Security Properties, is responsible for the management of the property.
Security Properties is a Seattle-based national real estate investment, development and operating company that has been providing quality housing to its residents as well as excellent financial performance for its investors for more than 45 years.
New York Life Real Estate Investors is a full service, fully-integrated real estate enterprise that has market-leading capabilities in origination, underwriting, and investment in real estate equity products and related debt, including real estate equity investments, commercial mortgage loans, commercial mortgage backed securities, and unsecured REIT bonds.

2015

 

Here's a first look at NBBJ's design for the Global Innovation Exchange

December 7, 2015

Journal Staff - Daily Journal of Commerce
Students are expected to start classes at the Bellevue campus of the Global Innovation Exchange by fall 2017.
To make that deadline, Wright Runstad & Co. wants to begin construction next spring at the 36-acre Spring District on a three-story, 86,000-square-foot building to house the initial graduate technology program.
Wright Runstad recently filed a design review application with the city of Bellevue showing images of the proposed structure and giving a construction timeline.
NBBJ is designing the GIX building, and Lease Crutcher Lewis is the general contractor.
GIX is a project-based technology institute created through a partnership of the University of Washington and Tsinghua University in China. The GIX website describes it as “a new way to educate innovators and spur innovation.” Programs will focus on the development and design of new technology, as well as entrepreneurship.
Microsoft contributed $40 million to GIX.
Next fall, the two universities will offer a dual-degree program. The initial cohort of students will spend their first year at Tsinghua before moving to the GIX campus in Bellevue in 2017. Subsequent cohorts will start at GIX in Bellevue.
The school initially will offer a 15-month master's degree in technology innovation with a focus on connected devices. In 10 years, GIX's website said, the goal is to have more than 3,000 students and offer additional programs in subjects such as mobile medicine, clean technology and smart cities.
A public meeting on the project is set for 6 p.m. Dec. 15 at Bellevue City Hall, 450 110th Ave. N.E.
In addition to space for GIX, the building will have 3,200 square feet of retail, 200 underground parking spaces and about 5,500 square feet of decks.
The design shows a “folded roof” with heights that range from 45 to 55 feet.
The team is going for a modern aesthetic but will use vertical expanses of glass and brick to reflect the area's industrial history, according to design documents.
The Spring District will be built around a future Sound Transit light rail station and could have up to 5.3 million square feet of offices, retail, housing and parks. Development could cost more than $2 billion.
Security Properties now is constructing five apartments buildings with 309 units and beginning to plan the second phase: 279 units in three buildings. Wright Runstad has permits for an office building and is seeking permits for a building that will house a brewery and creative office space.
The GIX website said it will try out new models of global learning. Other research universities could join as partners in the future, as well as companies and nonprofits.
 

Apartment Acquisition: $95.8 Million

December 1, 2015

Commercial Executive Magazine
Read more
 

Bridges@11th designed to make residents and environment healthier

December 1,2015

Journal Staff - Daily Journal of Commerce
Bridges@11th, a new apartment complex in the University District, has earned LEED silver certification from the U.S. Green Building Council.
Security Properties developed the project at 4557 11th Ave. N.E. It was completed in August.
GGLO was the architect and landscape architect. The team also included Bumgardner Architects, interior designer; Walsh Construction Co., general contractor; and Swenson Say Faget, structural engineer.
Bridges has three buildings — eight, seven and five stories — connected by passageways and skybridges.
There are 82 studio and open-one-bedroom units; 24 one-bedrooms; 12 loft one-bedrooms; 58 two-bedrooms; and eight three-bedrooms.
The complex also has 1,300 square feet of retail as well as community spaces and 125 parking stalls.
A rooftop deck is on one building and a pedestrian-oriented street called a woonerf separates two buildings.
Landscaping uses native, adaptive and drought-tolerant plants to help keep potential pollutants from storm drains.
GGLO said the skybridges allow access to the rooftop deck. One building would have needed a second internal stairway if it didn't have a skybridge.
Bridges@11th was used as a case study by the Center for Active Design in New York for its innovative approach to improving the health of residents, GGLO said.
The University of Washington owns the land, and arranged a long-term lease with Security Properties to develop the site in a joint venture with a capital partner.
Employees from the UW and Seattle Children's get priority in renting the units. The goal is to help replace housing that was removed for an expansion at Seattle Children's.
 

‘Peloton’ apartments on Williams-Vancouver corridor take inspiration from cycling

November 30,2015

Jonathan Maus - Editor - Bikeportland.org
What is it about bicycles that inspires Portland’s residential real estate developers? First there was Milano, then Velomor, and now there’s the Peloton Apartments.
“Our apartment project caters to the biking community.”
— Gus Baum, Security Properties
Saturday night while biking by the construction site on the block bordered by North Williams, Skidmore, Vancouver and Mason I noticed a new banner. I had to pull over and stop when I saw the word “peloton” and the sign with a design that included dozens of cute little bikes.
Just last week I was talking with our news editor Michael Andersen about how bicycles are such a common symbol in many of Portland’s recent apartment and condominium projects. If not in the name of the building itself, bicycle-inspired graphics can often be found on the signage and exterior decor of many of the new buildings sprouting up on Portland’s skyline.
It’s not surprising that bicycles figure into developers’ plans. After all, bicycling is arguably the most well-known brand attribute of Portland these days (with craft beer and the food scene rounding out the top three). Heck, even out-of-town sportswriters find ways to mention bicycling in completely unrelated stories.
In the case of the Peloton Apartments, the developer of the 268-unit project says inspiration for the name came from being located on Portland’s busiest bicycle corridor.
Gus Baum of Security Properties shared with us via email this morning that, “Since inception, the Peloton site was focused on taking inspiration from the unique community on N. Williams, and in particular the bike gateway to the city via Vancouver headed south and Williams headed north.”
“Literally hundreds of avid bicycle enthusiasts,” Baum continued, “from commuters to casual riders use the thoroughfares to navigate to north and northeast Portland every day. We wanted our multi-family apartment project to embrace not just the two major streets surrounding our project but to bike culture in Portland overall.”
Bicycles on the marketing banner.The new buildings are going up across the street from the First AME Zion Church, providing a sharp contrast with the corridor’s past.
What’s more, Baum says the color schemes of some units were inspired by a popular racing bike and some doors in the project will match the color of vintage yellow jerseys from the Tour de France.
The word peloton comes from the French “platoon” and today is used to refer to the main group of riders in a bicycle race. Baum is likely unaware of the irony of using a name from competitve cycling for a building on streets where high-speed bicycle riding — also known as “Cat 6” or “hipster racing” according to the Urban Dictionary — is rampant and often ridiculed.
Thankfully bicycling will be more than just part of the origin story at Peloton Apartments. As we reported last year, the four-building development will include a “pedestrian-focused” woonerf space. Baum says bike-loving residents of the Peloton will also enjoy 275 bike parking stalls, a bike club, and “numerous connections to Portland’s bike community through artwork, branding and other gestures.”
The banners visible today on the fence around the construction site are part of that branding effort. They were designed by Portland-based OMFG Co.
The Peloton Apartments are just the latest in the ongoing transformation of North Williams Avenue. What used to be a place that housed half of Portland’s black residents has changed drastically in the past decade and bicycles and the people who ride them have been at the forefront of that change.
 

Multifamily Goes for Nearly Nine Figures

November 3,2015

Lisa Brown - San Francisco Editor - GlobeSt.com
SCOTTSDALE, AZ—Pillar at Scottsdale, a 539-unit, class-A multifamily property with 539 units located at 17212 North Scottsdale Rd., sold for nearly $96 million or $177,644 per unit. The asset was purchased through Seattle-based Security Properties Multifamily Fund II in its second joint venture with Boston-based Intercontinental Real Estate and its US REIF Fund. It is Fund II's second purchase in the Phoenix market and the 11th asset overall. This is the 89th asset in the Intercontinental Fund.
Davis Vaughn, investment manager/acquisitions with Security Properties tells GlobeSt.com: "We purchased Pillar at Scottsdale because of the A+ location in North Scottsdale, and the unique product type. This was a rare opportunity to buy in Scottsdale, the highest rent submarket of the Phoenix metro, in a location with immediate access to retail amenities and jobs. We were also attracted to the unit mix as nearly 50% of the units are townhome-style and 75% of all units have direct-access garages. There is a significant value-add opportunity to renovate the units as most new construction has a much smaller percentage of these types of units and so we feel the market for them is being underserved. With a basis well below replacement cost and a bulletproof location, we hope to create long-term value for the investors in our Multifamily Fund II."
The subject was built in 1999 and was 96% occupied at the time of sale. The location is across the street from the TPC Scottsdale golf course and the five diamond Fairmont Princess Resort. To the west is the Reach 11 Recreational Preserve which is a 1,500-acre park with 18 miles of hiking trails as well as a large sports complex.
It is located in the Scottsdale Airpark submarket, putting it within a 5-mile radius of 142,000 jobs and some of the Valley’s most notable corporate employers including the Mayo Clinic. The clinic is opening a new $314 million cancer center in 2016 that will create 1,000 new jobs. Adjacent to the Mayo Clinic is the American Express campus with 3,000 jobs. Additional blue-chip companies with large presences in the area include Prudential, Vanguard, JP Morgan Chase, Starwoodand Scottsdale Healthcare.
Pillar at Scottsdale is surrounded by a number of high-end retail, dining and entertainment venues including Kierland Commons and Scottsdale Quarter. These two premier mixed-use developments in North Scottsdale are located just 1 mile from the community with retailers such as the Apple store, the Nike store, Lululemon and Forever 21. Trader Joe's is in the center diagonal to the subject and Whole Foods is less than 1 mile north.
The interiors will be updated and the exterior and amenity space will also be upgraded to be consistent with the new interiors. The end product will be priced below new construction, but be able to offer direct access garages and townhome units that most of the competition does not have, plus a comprehensive amenity package that includes one of the top pool areas in the market, an in-door basketball court and fitness center.
Tyler Anderson, Sean Cunningham, Asher Gunter and Matt Pesch with CBRE’s Phoenix office negotiated the transaction.
 

Angeline opens in Columbia City

October 26,2015

Journal Staff - Daily Journal of Commerce
Apartments in the Angeline are nearly finished, and ready to be leased.
Security Properties developed the mixed-use building between South Angeline and Edmunds Streets, just off Rainier Avenue South. The site is at the edge of the Columbia City historic district, on what was once a surface parking lot.
The 193 units sit above a 25,000-square-foot PCC grocery store that opened in July, and another 5,000 square feet of retail.
Bumgardner designed the building. Deacon is the general contractor.
The design is intended to extend the style of the historic district's buildings and streets to Columbia City Park. The southeast side reflects the older buildings' brick facades. The exterior has a more modern look to the north, facing the park.
Two new streets — Park Drive South and South Angeline Street — are designed to function as woonerfs, and give pedestrians priority over cars.
The Angeline has 223 parking stalls on two below-grade levels.
Residents can use a bike club, fitness room, theater, sixth-floor lounge, dog-wash facilities and a roof-top terrace with P-patches.
On the second floor will be an urban farm, providing fresh produce for the deli.
Other members of the design team include: RDH, building envelop and energy consultant; KPFF, civil engineer; SSA Acoustics, acoustical engineer; SSF, structural engineer; GGLO, landscape design; LightWire, exterior lighting; and GeoEngineers, geotechnical advisor.
Artwork was done by Kim Hall, Anna Sher and Chris Daly.
 

Security Properties plans more apartments in this Bellevue neighborhood

October 19,2015

Becky Monk - Special Projects Editor - Puget Sound Business Journal
Security Properties is doubling down on one Bellevue neighborhood.
The Seattle developer hasn't completed phase one of a set of apartments in Bellevue's long-planned Spring District, a $2.3 billion mixed-use project in what was an industrial neighborhood in Bellevue. Now it's submitted plans with the city of Bellevue for the second phase of construction, which consists of three building with 279 apartments.
Security President Tim Overland told the Business Journal in June it planned to move forward with the project.
Security broke ground in June on phase one. The Sparc is made up of five-buildings with 309 residences and 14,000 square feet of commercial space.
The Spring District projects represent the first time that Security has developed a new mixed-use project on the Eastside.
“We are right at the front of the Spring District,” Michael Nanney, Security's director of multi-family development, told the Daily Journal of Commerce. “My belief is as the Spring District becomes the next great neighborhood in Bellevue, we will see increased building heights.”
Wright Runstad, in conjunction with Shorenstein Properties of San Francisco, is developing the 36-acre Spring District east of Interstate 405 in the Bel-Red corridor. Earlier this year, the district landed its first big technology tenant: GIX, a Microsoft-supported project that the University of Washington is jointly establishing with Tsinghua University of China. Within a decade, the project partners expect that more than 3,000 students will be studying at GIX.
Nanney said Security will permit each of the three buildings in the second phase of the project separately. GGLO was the architect for phase one. Mithun was tapped to design the second phase.
 

Security Properties Multifamily Fund Acquires 539-Unit Apartment Community in Scottsdale, Arizona

October 8,2015

MultifamilyBiz.com
SCOTTSDALE, AZ - Security Properties and Intercontinental Real Estate Corporation purchased Pillar at Scottsdale, a 539-unit, Class A multifamily property located in Scottsdale, AZ, for $95,750,000. The asset was purchased through Security Properties Multifamily Fund II in its second joint venture with Intercontinental and their US REIF Fund. It is Fund II's second purchase in the Phoenix market and the 11th asset overall. This is the 89th asset in the Intercontinental Fund.
The subject is a high quality, core-plus Class A project that was built in 1999. Almost ½ of the units are townhome style plus ¾ of all units feature direct access garages. The location is outstanding as it is across the street from the TPC Scottsdale golf course and the Five Diamond Fairmont Princess Resort. To the west is the Reach 11 Recreational Preserve which is a 1,500 acre park with 18 miles of hiking trails as well as a large sports complex. To the south is the high-end shopping destination for Scottsdale with retailers that include an Apple Store, Nike Store, Lululemon and Forever 21. Trader Joe's is in the center caddy corner to the subject and Whole Foods is less than one mile north.
There are multiple employment drivers in the immediate vicinity including the Mayo Clinic two miles east. The clinic is opening a new $314M cancer center in 2016 that will create 1,000 new jobs. Adjacent to the Mayo Clinic is the American Express campus with 3,000 jobs. Additional blue-chip companies with large presences in the area include Prudential, Vanguard, JP Morgan Chase, Starwood, and Scottsdale Healthcare.
Because of the strength of this location, there is a value-add component of this acquisition as all units feature original interiors. The interiors will be updated and the exterior and amenity space will also be upgraded to be consistent with the new interiors. The end product will have a great market position because it will still be priced below new construction, but be able to offer direct access garages and townhome units that most of the competition does not have, plus offer a comprehensive amenity package that includes one of the top pool areas in the market.
David Dufenhorst, CEO of Security Properties says Fund II acquired this property because, "this was a rare opportunity to apply our proven value-add expertise to a unique asset with an A+ location. We are excited about the employment drivers in the area and firmly believe in the long-term viability of the townhome-style product. We think our renovation program will create value for our investors by producing a core asset well below replacement cost."
According to Jessica Levin, Director of Acquisitions for Intercontinental, "Phoenix is a dynamic market and Scottsdale is the most desirable location within the metro. With premier access to amenities, a location on Scottsdale Road, and high quality construction, this asset offers everything we look for in an investment. This unique combination makes Pillar at Scottsdale a fantastic long term investment for our investors."
 

Developer scores big payday without building a thing

October 7,2015

Alby Gallun - Staff Reporter - Chicago Business
A River West property has sold for nearly $17 million, a deal that shows how developers can sometimes pocket a big profit without building anything.
Security Properties, a Seattle-based developer, has flipped the Gonnella Baking site at 1001 W. Chicago Ave. for $16.8 million just six months after buying it for $7.8 million, according to Cook County property records. Security sold the parcel to Bond Cos., a Chicago-based developer that plans to build a 363-unit apartment building there.
Land prices in the city have soared as developers have gobbled up properties for new residential towers, creating flipping opportunities for speculators. But the Gonnella site more than doubled in value largely because Security persuaded city officials to rezone it for a big residential project.
Bond plans to pick up where Security left off. Robert Bond, the company's co-founder and president, said he expects to have the project's construction financing in place within 45 days and break ground in first-quarter 2016. The developer has retained Security's architect, Chicago-based FitzGerald Associates Architects, which designed two buildings of 14 and 15 stories on the property.
The developer plans to tweak the design and add some amenities to attract millennial renters, according to Bond, who said it's too early to discuss details.
"We will have a project that's uniquely designed to meet the market segment we want to reach,” he said.
Bond expects to complete the development in 2017. He declined to say how much it would cost to build.
HEFTY RETURN WITHOUT ADDED RISK
However the project turns out, the property was successful investment for Security, allowing the developer to generate a hefty return without taking on the additional risk associated with a big development.
Some observers may see that as a wise move. The risks for apartment developers are growing these days amid a construction boom that's expected to add more than 7,500 units to the downtown market over the next couple years. But Bond isn't worried about a glut, saying demand will be strong enough to absorb the extra supply.
Though Security sold the property for a big gain, the developer did have to incur some major costs to cash out for so much more than it paid. It likely paid large sums to FitzGerald to design its project and to the attorneys it hired to manage the rezoning process. Though Security agreed to buy the parcel more than two years ago, it didn't close on the acquisition until it secured the new zoning.
The property's value also may have benefited from new affordable housing regulations that go into effect this month. Developers are more willing to pay up for land with residential zoning in place because those that apply for zoning changes now must follow the new rules, boosting their costs and depressing the value of their land, said Chicago developer Steven Fifield, who bid on the Gonnella site.
LOCATION CONSIDERATION
Bond said he pursued the property because it's in an up-and-coming walkable neighborhood with good transportation options, along Milwaukee Avenue's “Hipster Highway” and close to a CTA Blue Line stop and the Kennedy Expressway. Several other apartment developments are in the works nearby, including a proposed 190-unit building about a block west and a 227-unit projectunder construction at 500 N. Milwaukee Ave.
The Bond project also includes more than 30,000 square feet of retail space. Bond aims to lease some of the space to a grocery store. If he succeeds, “this will be a great anchor for the neighborhood,” said Fifield, chairman and CEO of Fifield Cos.
Best known in Chicago as a retail developer, Bond recently built the Maxwell, a 230,000-square-foot shopping center in the South Loop. The firm also is getting ready to break ground on Kildeer Village Square, a 180,00-square-foot shopping center in northwest suburban Kildeer next to a completed Bond project anchored by a Whole Foods Market, Bond said.
Though Bond hasn't developed apartments in Chicago, it has multifamily projects in the works in Charlotte, N.C., and Los Angeles, he said.
 

Mission Unaffordable: Here's why housing in Seattle will stay out-of-reach

August 21,2015

Marc Stiles - Staff Writer - Puget Sound Business Journal
From his downtown Seattle office, Stephen Whyte runs 93 low-income housing complexes across the nation.
Whyte should be a key player in solving what Seattle Mayor Ed Murray calls “our worst housing affordability crisis in decades.”
He’s not.
All of Whyte’s expertise at tapping tax credits and taming costs melts away in the blistering-hot Seattle property market. Of the eight projects his company, Vitus, bought and rehabbed last year, none was in Washington state.
“Seattle is an ultra-expensive market right now,” Whyte said. “It’s very difficult to find (low-income) projects that work.”
Time spent with people like Whyte — the experts who actually create and manage housing for people with modest incomes — shows that overwhelming economic forces are conspiring to sweep aside the mayor’s dream of building a city affordable to all of its workers.
According to Zillow, the Seattle median home value of $507,600 is projected to rise 7.3 percent in the next year. The median rent is $1,825.
Even if all 65 recommendations of Murray’s affordable housing task force were put into action — including the upzones, developer fees and doubling the housing levy to $290 million — it likely would only marginally boost the supply of affordable dwellings to the people who brew Seattle’s lattes, tend its sick and clean its offices.
“Unfortunately in Seattle, that’s where (doing affordable housing) gets very difficult,” said Bryon Gongaware, managing director of the affordable housing division at Security Properties, another Seattle developer that finds itself stymied in its home town.
Bellevue-based DevCo, yet another low-income developer, is building 516 units in Federal Way and will break ground soon on a 261-unit property in Kent.
But DevCo hasn’t built in Seattle.
It can’t compete against the market-rate builders paying top dollar for development sites, said company President Jack Hunden.
Security Properties, like Vitus and DevCo, makes money by building and operating low-income units — about 7,400 such units around the nation.
But what does today’s economic reality enable Security to do in Seattle? It’s building a 40-story luxury tower with a rooftop pool.
Competition at bay
Some people might be surprised at one thing that Vitus, Security Properties and DevCo have in common beyond their low-income housing portfolios: they make money on them.
While most people associate affordable housing with nonprofit organizations, such as Capitol Hill Housing and Bellwether Housing, the industry also includes plenty of for-profit companies. In fact, the for-profits and nonprofits often team up on projects.
Together, they amount to a $2.6 billion-a-year industry in King County, employing 14,600 people directly and indirectly.
It’s a complex, regulation-driven business, but not as risky as that sounds because demand for affordable housing is insatiable, said Tim Overland, president of Security Properties.
And surprisingly, he added, the return on investment can be higher than on market-rate deals.
Given that potential, why aren’t more private companies building affordable housing?
“It’s complicated, it’s niche-y — and most institutional capital partners don’t get it and aren’t interested in buying it,” said Overland. Of Security’s 15,400 total apartments, just under half are in its affordable-housing portfolio.
This hybrid approach is intentional, with the affordable-housing business serving as a counterbalance to buying and building market-rate housing. Market housing tends to be more cyclical and volatile, Overland said, “whereas affordable housing is very stable from a cash-flow perspective.”
Building and managing affordable housing isn’t without risk. Like a conventional apartment project, affordable ones have to be built on time and on budget. The properties must be managed so employees and investors can be paid.
And the developer has to comply with myriad regulations. Failure could result in the government taking back tax credits that were used to fund the project, and the developer would be on the hook for that plus interest and penalties.
This can be scary. But for a company like Security, which has a team dedicated to compliance issues, it’s a good thing, said Gongaware.
“I like that scary factor,” he said, “because it reduces the buyer pool and allows us to be more competitive for (affordable housing) transactions.”
Where the jobs are
At Vitus, Whyte looks north from his downtown office window and sees a forest of buildings rising up for the ever-expanding Amazon.com.
He’s looking at the challenge. Amazon is a Pied Piper for 24,000 highly paid employees in Seattle, people whose ability to pay for close-in homes and apartments has helped drive Seattle prices up 11 percent in the past year, according to Zillow.
Affordable housing developers like Vitus are caught between powerful forces that limit their ability to turn on the spigot of supply just because politicians like Murray say it’s needed.
Thirteen years ago, Vitus bought a 332-unit low-income property in White Center. Whyte doesn’t think he could do that today because the real estate market “is so overheated now.”
Vitus does have 33 properties in Washington, but most are in rural areas, such as Darrington in Snohomish County and Toppenish in Yakima County.
The experiences of developers like Vitus, DevCo and Security show why significantly expanding the supply of low-priced dwellings in a superheated real-estate market may turn out to be mission impossible.
 

DEAL OF THE DAY: Location Proves Key in Latest Security Properties Buy

July 23,2015

Mike Ratliff - Senior Associate Editor - MultiHousingNews Online
Henderson, Nev.—A 2007-built Class A asset in Henderson, Nev., has changed hands. Seattle-based Security Properties grabbed Verona Apartment Homes for $40 million. The 275-unit purchase represents the firm’s second purchase in the Las Vegas market via its Multifamily Fund II. The asset was sold by its developer, Ovation.
“The area offers an opportunity for growth not just in the traditional sectors like gaming and hospitality, but also in newer industries like medical and data centers,” said Davis Vaugh, investment manager at Security Properties. “Given the proximity to Union Village, which we believe will be transformative for both Henderson and the Las Vegas metropolitan area, we look forward to being active in Las Vegas for years to come.”
Location, as it tends to do, played a big role in the purchase. The asset is located close to the Galleria Mall and I-515, and is adjacent to Union Village, a $1.2 billion, 155-acre master-planned mixed-use project that is under construction.
It should come as no surprise that a value-add plan is in play. Security Properties has plans to update the exterior, clubhouse and amenity spaces in the near term. A light renovation of unit interiors will follow. There is no word on current occupancy, but Yardi Matrix data show average rents in the $1,050 range. Amenities at the property include a fitness center, clubhouse, swimming pool, spa and covered parking.
 

Bellevue's mega Spring District lands Microsoft/UW venture GIX as first major tenant

June 18,2015

Marc Stiles and Jacob Demmitt - Staff Writers - Puget Sound Business Journal
Among the biggest winners of the decision to site the Global Innovation Exchange, or GIX, in Bellevue are two Seattle firms: Wright Runstad & Co., and Security Properties.
Wright Runstad, in conjunction with Shorenstein Properties of San Francisco, is developing the 36-acre Spring District, a mixed-use development that will be GIX's permanent home. Security Properties is developing a 309-unit apartment project in the district east of Interstate 405 in the Bel-Red corridor, and now plans to start building the second phase with more than 275 units in the summer of 2016, Security President Tim Overland said Thursday.
Initially, GIX will be housed in roughly 100,000 square feet in one office tower, according to Wright Runstad President Greg Johnson, who expects the international tech training institute to expand over time. He added the first building will be done within 18 to 24 months, allowing GIX to open in the Spring District in 2017.
The decision to put GIX in the $2.3 billion Spring District is a godsend for the project with an audacious goal: turn an industrial area into a walkable, urban neighborhood of office towers, residential buildings, parks and a light-rail stop. Wright Runstad aspires to make its project to Portland's Pearl District, formerly a warehouse district that's now an urban oasis of housing and commercial buildings.
Construction of The Spring District's streets and other infrastructure began last year, and Security Properties started building the first phase of the apartments earlier this month.
Now the district has its first big technology tenant: GIX, a Microsoft (Nasdaq: MFST)-supported project that the University of Washington is jointly establishing with Tsinghua University of China. Within a decade, the project partners expect that more than 3,000 students will be studying at GIX.
"I clearly do think that GIX will help be a launching pad for all this new development," Microsoft General Counsel Brad Smith said Thursday.
Having a stop along the future light-rail line that will run from near Microsoft's headquarters in Redmond to Seattle was important in the siting decision, Smith added. In Seattle, riders will be able to transfer to trains that will run to the UW. The Seattle-to-Redmond line is scheduled to open in 2023, and next year a station on the UW's campus will open.
Connecting the UW with GIX will be "hugely helpful," Smith said, adding the GIX team needed a place with ample land. Ten years ago, the campus likely would have been built in Seattle's South Lake Union, but today there's no parcel large enough.
"I think one of the things that’s not yet completely appreciated in our region is just what a unique opportunity the Bel-Red corridor offers," Smith said. "Here is an area of land that’s larger than Central Park in New York that has been completely rezoned for development. Yet it is also land that is connected to technology corridors and is part of a thriving metropolitan area."
He said it became clear "fairly quickly that the Bel-Red corridor was the Bel-Red corridor was a good place to look.”
He added that GIX chose the Spring District due to "the sterling reputation of Wright Runstad," which has close ties to the UW and Microsoft. The UW's real estate school is named for Wright Runstad co-founder and CEO Jon Runstad and his wife Judy Runstad, an attorney, and Wright Runstad developed Microsoft's headquarters.
 

Concentrated construction: Two big projects are rising on same Denny Triangle block

June 12,2015

Marc Stiles - Staff Writer - Pudget Sound Business Journal
There’s no shortage of places in the Puget Sound region where extraordinary amounts of construction are occurring, but one block in the Denny Triangle area of downtown Seattle is particularly busy.
Construction started this month on a large mixed-use project called Tilt49, which will have a 37-story apartment tower with 410 units and an 11-story office building. A Seattle company, Touchstone, put the Tilt49 project together, and is developing the office building, which will have 300,000 square feet of space. Mortenson Development and AMLI Residential are developing the apartment tower. More about Tilt49 is at bizj.us/1hqcr3
Tilt49 shares the block with a uniquely designed 40-story, 357-unit apartment tower called Kinects. Security Properties is developing the building, which gets progressively larger on each floor the higher up you go, creating a wedge shape. Bumgardner is the architect, and CKC is the structural engineer. More about Kinects is at bizj.us/1ht34r.
Both Touchstone and Security Properties have cited the Denny Triangle location as a driver of their projects.
Security Properties Chief Development Officer John Marasco said the Kinects name “says it all” because the triangle is at the nexus of Capitol Hill, South Lake Union and downtown, where the Westlake transit hub is half a mile away.
It is a natural development area, he said, given its proximity to downtown and great access to transportation alternatives.
 

What if they built a 40-story tower in Seattle and no one noticed?

June 10,2015

Marc Stiles - Staff Writer - Puget Sound Business Journal
Security Properties this spring started construction of a downtown Seattle high-rise with no hoopla, but unlike the quiet launch the uniquely shaped building itself will stand out on the skyline.
The 40-story apartment project at 1823 Minor Ave., is called Kinects and gets progressively larger on each floor. The result will be a kind-of wedge-shaped building that's topped by a rooftop swimming pool.
That construction of such a big project could start with little notice indicates how much building activity is occurring in this part of the city called the Denny Triangle. It's where Amazon (Nasdaq: AMZN) is building its high-rise campus and other developers are under way on big projects. (See the map in the slideshow section of this post.)
Seattle architecture firm Bumgardner designed the 357-unit project, and CKC of Bellevue is the structural engineer. Andersen Construction is building Kinects.
The structural design is the key, according to Security Properties. The team took what a Security representative said was the unusual step of having the structure formally peer reviewed. Without that, the tower would have been required to have redundant structures and beams, and that would have compromised the design.
Also unusual, at least in Seattle, is the pool. "We do not know of any other tower-top pools other than at the Four Seasons Hotel, and we need to note that theirs is actually a one-season pool, whereas ours – enclosed and lit – will be a truly four-season pool," said John Marasco, Security Properties' chief development officer.
The Kinects name refers to the location of the property. The Denny Triangle is at the nexus of Capitol Hill, South Lake Union and downtown, said Marasco, who's not concerned that several similar-sized projects have been built nearby or are planned.
Marasco said people are still renting apartments in high-rises, and that the pool and other amenities will help give Kinects an edge.
Plus, he said, the city's new pending "linkage fee," or tax on real estate development, will significantly constrain the supply of new apartments.
Security Properties is developing Kinects on land that some members of the Bartell Drugs family own, and the total development cost is around $150 million, according to Security officials. Insurance company Pacific Life is providing the construction financing, the the State Teachers Retirement System of Ohio is the equity partner on the project.
The tower is scheduled to be done in the summer of 2017.
 

Spring District apartments starting

June 10,2015

Journal Staff - Daily Journal of Commerce
Security Properties broke ground this week on its first two apartment buildings in the 36-acre Spring District in Bellevue.
They will have a total of 79 units, and should open late next year or in early 2017.
Security Properties is planning five buildings in all, with a total of 309 units and 305 parking spaces.
They will range from three to nine stories and be built in phases, with units opening over about two years. This image shows the largest building: a nine-story, 100-unit structure due to open in mid 2017.
The developer calls the five-building complex Sparc, and says it will be the spark that sets off the Spring District. Sparc is also the name of an early microprocessor made by Sun Microsystems in the 1980s.
Sparc will have about 14,000 square feet of retail. The space has been leased, Security Properties said, but it did not name the tenant.
Security Properties has an option to buy an 84,000-square-foot parcel in the Spring District east of Sparc where it could build another 250 units.
Sparc will occupy about half of Security Properties' land and the rest will be open space.
Construction also is underway on a two-acre park in the district.
John Marasco of Security Properties said in a press release, “While the architecture is edgy and urban, spectacular mountain and lake views and significant open spaces will help people build community and enjoy the outdoors.”
Amenities in Sparc will include a gym; rooftop lounge with a demonstration kitchen, outdoor deck and putting green; a WiFi cafe for residents; and a bike club and repair center.
There will be a hillclimb linking the apartments to the intersection of 120th Avenue Northeast and Northeast 12th Street. Stairways will have several plazas leading to the main public plaza and the apartments. A bike runnel on one side of the stairway will allow people to push bikes up the steps. The other side of the steps will have stormwater filtration.
USAA Real Estate Co. is Security Properties' equity partner. This project is Security Properties' first with USAA and its first on the Eastside.
The team is the same for all five buildings. GGLO is the architect, and Walsh Construction Co. is the general contractor. Other members are Triad Associates, Bumgardner, Cary Kopczynski & Co., Madrona Ridge Residential and Urban Relations.
Wright Runstad & Co. and Shorenstein Properties are developing the Spring District. The $2.3 billion neighborhood will be built around a future Sound Transit light rail station and could have up to 5.3 million square feet of offices, retail, housing and parks.

 

 

CFO of the year: Bob Krokower manages the risk in real estate at Security

June 5,2015

Marc Stiles - Staff Writer - Puget Sound Business Journal
Bob Krokower not only knows numbers, he knows people, too.
These traits have earned the CFO of Security Properties, a Seattle-based national investor and developer of apartments, high praise from his colleagues.
Company President Tim Overland said Krokower’s financial stewardship is unparalleled. Having someone like that in charge of the books is vital for any company, but it’s particularly important for companies in real estate, which is an especially capital-intensive business.
Currently, Security has approximately $350 million of apartment development in process, and has closed around $200 million in conventional multifamily acquisition so far this year. In addition, Security’s “affordable housing pipeline has been as robust as it has ever been,” Overland said.
He added the company has been able to do this, in part, because Krokower has cultivated new lender relationships while nurturing existing ones with national and local banks, including KeyBank, Compass Bank, PNC, Umpqua and HomeStreet.
In 2014, Krokower helped improve the controls of Secrurity Property’s new property management company startup, Madrona Ridge Residential. That company has grown from zero to nearly 300 employees during the last three years. His colleagues say he takes a hands-on approach to continue to improve controls, in what is a very dynamic, people-based business.
Krokower not only leads as CFO, he also has been on the forefront of a critical personnel decision. Last year, John Orehek, Security’s longtime CEO and president, retired. Security Properties officials said Krokower was the first in line to help shepherd the ensuing transition, with two Security employees, David Dufenhorst and Overland, becoming CEO and president, respectively.
With the real estate market soaring, it’s an exciting time to be in the business. Krokower said the trick is managing this exuberance to protect the company from the next downturn is his biggest challenge.
“I have been through a lot of real estate cycles, and I know something is going to happen. You have to anticipate (the slowdown) and plan for it,” he said. It’s all about “managing your risk without hobbling the company.”
Krokower’s is an up-from-the-bottom story. He was working loading trucks for a retailer and studying accounting at California State University, Northridge, when he landed a spot in the company’s accounting department as a bookkeeper. He wasn’t aiming to become the CFO of a major real estate company when he entered the world of finance as a young man.
“I wanted a living. I like numbers. Accounting just sounded like a good way to go,” Krokower said.
He wound up working as a senior vice president for a California real estate investment company, and real estate is the path he continued to follow. He moved to the Northwest in the early 1990s, eventually becoming CFO for Seattle-based Harbor Properties (now Mack Urban). He joined Security Properties as CFO in 2003.
Krokower stays on top of Security Properties’ finances even though he’s up for an hour in the middle of most nights taking care of his family’s seven dogs.
“It’s crazy,” said Krokower of his nighttime routine of releasing the pups – and carrying some of the older ones out – to relieve themselves, and then feeding them. “You’ve got to be nuts.”
And on weekends, he’s often on the road transporting dogs hundreds of miles as part of his wife Fay’s dog-rescue nonprofit, Ferry Dog Mothers. “I call it a mitzvah – a good deed.”
Get to know Bob Krokower
Born: Los Angeles
Raised: Los Angeles
Age: 70
Education: Bachelor’s in accounting, California State University, Northridge, 1963-1968,
Career: Senior auditor, Arthur Andersen, 1968-1972; Controller, Donald L Bren Co., 1972-1978; senior vice president finance and administration, Donald L. Bren Co., 1978-1992
Civic: My wife and I operate a nonprofit dog rescue, Ferry Dog Mothers.
Growing up you wanted to be: I don’t know
First dollar: Mowing lawns
Most proud of in 2014: Facilitating a change in senior management with lenders and stakeholders.
Best thing about your job: Mentoring and teaching younger associates
This would surprise people about you: I am an open book, there should be no surprises.
If you had to choose another career, you would be: Teaching
Next big thing (business): At this stage in my life, it is just to keep on doing what I have been doing.
Next big thing (personal): Just to spend a lot of time with the family
In your spare time you like to: Spend time with the kids and grandkids, dinners with my wife and transporting dogs.
Thing they didn’t teach you in business school that you needed to know to be a great CFO: Never burn a bridge, you run across people in your field over and over again.
Best lesson from a mentor: While in college I worked for John Jamalian who was controller of a retail chain. He taught me the importance of maintaining positive relationships.

 

 

Security Properties CFO wins 2015 CFO of the Year

May 12,2015

Puget Sound Business Journal
The Puget Sound Business Journal's CFO of the Year Awards are presented to financial professionals in Washington for outstanding performance in their roles as corporate financial stewards.
See below for a list of 2015 honorees.
This program highlights the importance of financial executives in the region. CEOs often are credited with their companies’ successes. They are the faces and voices of the business. However, in many cases, they wouldn't have arrived at that point without the strategic guidance of their CFOs. Chief financial officers must be fearless financial strategists and provide guidance and sound advice to their CEOs and board directors in order to realize their CEOs’ visions.
We honor the region’s top financial executives via our annual CFO of the Year Awards program because of the role the CFOs play in the success of their companies and in the growth of the Puget Sound region's economy. Each winner is also profiled in a Puget Sound Business Journal special report.
Join us for The 2015 CFO of the Year Awards on June 4th and meet this year's winners!
Congratulations 2015 CFO of the Year Honorees!

Nonprofit Organization (with less than $50 million in revenue):
  • Jean Ingebritsen, Big Brothers Big Sister of Puget Sound
Private Company (with less than $100 million in revenue):
  • Mark Klebanoff, PayScale Inc.
Private Company (with between $101 million and $500 million in revenue):
  • Bob Krokower, Security Properties
Private Company (with more than $500 million in revenue):
  • Chrissy Yamada, EvergreenHealth
Public Company (with less than $1 billion in revenue):
  • Clint Stein, Columbia Bank
Public Company (with more than $1 billion in revenue):
  • Brandon Pedersen, Alaska Air Group Inc.
Leadership Award:
  • Margaret Meister, Symetra Financial Corp.
 

Security Properties Finds TOD Value Along D.C.’s Silver Line Expansion

April 27,2015

Mulithousingnews.com
Ashburn, Va.—Security Properties has completed its first acquisition in the Northern Virginia/Washington D.C. area with the purchase of The Grove at Flynn’s Crossing. A location three blocks from the Metrorail’s Silver Line Phase 2 expansion certainly played heavily into the transaction. The 168-unit community will be served by the Route 772 Station—the western terminus of the line—which has an estimated completion date in 2018.
Security Properties dropped $31 million on the acquisition, according to data from Yardi Matrix. Aspen Square Management was the seller. Aspen picked up the asset back in December 2012 for $18.1 million. The asset features a mix of one, two and three-bedroom apartments. Amenities include a fitness center, clubhouse, pool and playground. In typical Security Properties fashion, the new owner will invest capital for improvements to both the interior and exterior of the property.
“This was a strategic acquisition for the company, as we plan this to be the first of many acquisitions in the Northern Virginia/Washington DC market,” says Bryon Gongaware, managing director of affordable housing for Security Properties.
 

Design Perspectives: Angeline Apartments will feed Columbia City

April 8,2015

Clair Enlow - Special to the Journal - Daily Journal of Commerce
Columbia City has a long history, but it has waited a long time for Angeline. Now a big package of sorely needed urban goods is being delivered, on a very tough site.
Security Properties is developing the mixed-use building between South Angeline and Edmunds Streets, just off Rainier Avenue South. It's anchored by a PCC Natural Markets grocery store with 193 apartments above.
Luckily, the project is not going to make this reviving neighborhood a different place. But it will be even more populated day and night — and more fun to walk around. When it opens in July, Angeline will give back to Columbia City with some new, semi-public streets.
Unlocking opportunity
Since the 1980s, signs of new life have been appearing along the streets of Columbia City: galleries, bookstores, bars and restaurants joined by a nonprofit bike shop and biodiesel co-op.
Columbia City Farmers Market, which has become a local institution, sets up outdoors on Wednesdays and attracts crowds from spring to fall. Sound Transit started light rail service along nearby MLK Way in 2009, and it stops at Columbia City Station, just a little more than two blocks from the old commercial center.
The stage was set in 1978, when Columbia City was anointed a historic district. That meant that any project proposed for the Angeline site had to satisfy a historic district review board.
And for decades, nothing did.
In the meantime, an old supermarket shell sat in the middle of a paved-over city block there — right next to a park, a Carnegie library and one of Seattle's intact streetcar-based commercial districts.
Security Properties purchased the site in 2011 from HAL Real Estate Investments, which had bought it in 2007. After lengthy reviews with community input, the landmarks board had rejected design proposals from HAL showing a 306-unit apartment complex wrapped around an interior court. The board was more receptive to Security Properties' proposal, which made the building very approachable from three sides.
The Angeline project was designed by Bumgardner, which also designed PCC's first supermarket-sized store in Fremont, part of a mixed-use project there called Epicenter.
At six stories, Epicenter and Angeline are each taller than their historic neighbors. But the five-floor residential part of Angeline is stepped back from the edge, and the tall walls are not parallel to the base. They shift direction, which makes for interesting views from all sides and from the many apartment balconies, and breaks up the bulk and scale.
Unfortunately, the character of the outer walls seems to shift abruptly with each corner, which makes the much-reviewed building look like it was designed by committee — which, in a way, it was.
Perhaps the biggest challenge to developing the site was an existing one-story corner bank with drive-through lanes and parking. The bank carves away about a third of the Angeline block, but it now faces 20-foot-high concrete party walls on two sides.
The good news is on top, where a long, broad deck above the 20-foot base of Angeline will support an urban farm similar to one that produces food for Bastille Cafe and Bar in Ballard, according to John Marasco of Security Properties, which owns the building in Ballard, too.
Woonerf-style street
While the bank holds to its suburban-style corner lot, Angeline will offer an urban way around it all. With large setbacks on two sides, a new, street-like private drive extends the path of South Angeline Street (named after Chief Seattle's daughter) west from Rainier Avenue South, connecting with South Edmunds Street by turning north. The idea is to provide a wide-open pedestrian connection between Rainier Avenue South and the park.
But this is also a nice drive. There will be perpendicular parking on both sides of the South Angeline Street extension, which will slow traffic. Then it gets a little more fun.
The bending roadway passes beneath an overhanging corner of the building (and the entrance to below-grade parking). But there is plenty of room to shelter cars and pedestrians at the ground level, according to architect Mark Simpson of Bumgardner, who said the corner was inspired by Corbusier's Villa Savoye and other early Modern buildings.
Before joining up with South Edmunds Street, the driveway will pass a broad, stepped courtyard on the long side of the Angeline, one that is filled with tables and chairs, and managed by the full-service PCC.
Along with the balconies above, those tables will have a great view over the new woonerf-like, car-and-pedestrian street — and over Columbia Park, a sweeping greenway bordered by mature trees, craftsman-style houses and the historic library building.
The third side of the Angeline could mean the most to Columbia City. Around the corner on existing South Edmunds Street is where the loading docks for the super-sized PCC store will be. There, the back-of-store logistics of a supermarket meet a savvy urban neighborhood.
It's not an easy dance, according to Simpson. Pedestrians can't be jostled too much, but business can't be disrupted, either.
But there's even more going on along this side. Columbia City Farmers Market has been setting up in a closed-off South Edmunds Street in season. And according to PCC CEO Cate Hardy, the natural food store is committed to doing its best to support the ongoing life of the outdoor farmers market through cross-marketing and other strategies that promote local growers.
The mix of regular traffic, delivery trucks large and small — along with stalls and booths on market days — will test these new relationships. Success is likely to be a matter of careful delivery timing — and true commitment by PCC.
But to make the loading area more hospitable to pedestrians as well as store personnel, the architect has designed a special canopy over the docks and sidewalk. It's just one more move in this dance.
 

Security Properties wants to start Spring District housing next month

March 23,2015

Nat Levy - Journal Staff Reporter - Daily Journal of Commerce
Security Properties is on track to start construction of the first housing project in the 36-acre Spring District in Bellevue within a month.
The developer is awaiting permits to build an underground parking garage that will be shared by five apartment buildings. Once that is done, Security Properties will start two apartment buildings.
The five buildings Security Properties is planning will range from three to nine stories and have a total of 305 units.
Michael Nanney of Security Properties said they will be built in phases and open one at a time, over about two years.
The developer is calling the five-building complex “sparc” because it will be the spark that sets off the Spring District. Sparc is also the name of an early microprocessor made by Sun Microsystems in the 1980s.
The team is the same for all five buildings. GGLO is the architect, and Walsh Construction Co. is the general contractor. Other members are Triad Associates, Bumgardner and Cary Kopczynski & Co.
Wright Runstad & Co. and Shorenstein Properties are developing the Spring District.
Security Properties could double down on the Spring District. It has an option to buy an 84,000-square-foot parcel east of sparc, and Security Properties estimates it could build up to 250 units on that site. The developer will set up a pre-application meeting with the city of Bellevue in a few weeks to begin planning that project.
Sparc will have 13,000 square feet of retail in one building. The space has been leased, but Security Properties did not name the tenant.
The sparc site is on the southwest corner of the Spring District, about 35 feet above the intersection of 120th Avenue Northeast and Northeast 12th Street. That elevation means every unit will have views of downtown Bellevue and Mount Rainier.
Nanney said at one of the first project meetings with the city in Bellevue City Hall, the team spotted the Safeway distribution center, which used to be on the site. Nanney said that was an “epiphany moment” when the team realized all the apartments would have great views.
There will be a hillclimb from the intersection to the apartment buildings. Staircases will have several levels of plazas leading to the main public plaza and apartment buildings. There will be a bike runnel on one side of the staircase, which allows people to push bikes up the steps. The other side will have stormwater filtration.
Apartments will be built on only about half of Security Properties' site. The rest will be open space, and construction is underway on a two-acre park in the district.
“It's going to be very inviting to come out of your unit and spend time on the site itself and meet people,” Nanney said.
There will also be a gym, rooftop lounge with a demonstration kitchen, resident WiFi cafe, and a bike club and repair center.
Security Properties' John Marasco said potential tenants could include tech employees — working at or near Microsoft — and medical employees working at Overlake Hospital Medical Center.
Security Properties has already done one project that targets medical professionals: Bridges@11th in the University District. The first units there are expected to open in May, and the complex is designed partially for employees of Seattle Children's and University of Washington School of Medicine. While planning that project, Security Properties asked employees what they wanted. That feedback lead Security Properties to add some three-bedroom units in the Spring District as well as more two-bedroom units and larger units in general.
Marasco has been tracking the Spring District for some time. He said he worked on an Urban Land Institute task force focused on the Bel-Red area, before zoning in the neighborhood was finalized.
Marasco said the neighborhood plan and the chance to work with Wright Runstad and Shorenstein Properties was what interested his firm.
“I liked it because it was a neighborhood being master planned very close to (downtown), that was going to include access to the light rail system, and that access is very limited on the Eastside.”
The $2.3 billion Spring District could have up to 5.3 million square feet of offices, retail, housing and parks.
Wright Runstad's first phase will be two office buildings totaling 491,120 square feet. NBBJ is designing the office buildings, and Howard S. Wright Cos. is the general contractor.
 

With $39M apartment buy, Seattle investors continue their Portland push

February 27,2015

Jon Bell - Staff Reporter - Portland Business Journal
A Seattle multifamily investment firm continued its march across the Portland metro region this week with the acquisition of a 243-unit apartment complex in Beaverton.
Security Properties, in a joint venture with PCCP LLC, has purchased Element 170 Apartments, a new construction, Class A, 243-unit multifamily property for $39 millionthrough its Security Properties Multifamily Fund II. The property is the latest of eight acquisitions in the fund.
HFO Investment Real Estate represented both Security Properties and the developer of Element 170, Metropolitan Land Group, in the transaction.
Element 170 Apartments was placed under contract in October 2013, began leasing in May of 2014, stabilized operations inJanuary 2015 and was acquired inFebruary 2015 by the joint venture. The location is immediately adjacent to the MAX Light Rail Station with access to downtown Portland and the airport. It is within two miles of the Nike World Headquarters and approximately five miles from the Intel campus.
"The property and the location are ideal, and we expect these factors to contribute to better-than-market revenue growth during our hold period," said Mark Hoyt, senior director of investments at Security Properties. "We were able to structure the purchase contract to lock in the price in the fourth quarter of 2013. This was an excellent outcome for our investors."
The 9.3-acre property consists of 10, four-story buildings and a leasing office/clubhouse building with amenities that include a pool, fitness center and conference room. The upgraded units offer custom cabinetry, in-unit washers and dryers, 9-foot ceilings and vaulted ceilings in all top floor units.
PCCP LLC is a real estate finance and investment management firm focused on commercial real estate debt and equity investments. It has approximately $6 billion in assets under management on behalf of institutional investors and has offices in New York,San Francisco and Los Angeles.
Security has been busy in Portland in recent years. In November, it broke ground on a four-building mixed-use development at North Williams Avenue and North Mason Street. It paid $11 million for the Honeyman Hardware Loft Apartments in the Pearl District in 2006, then sold them this past December for $37 million. Security also paid $34.3 million for three Beaverton apartment complexes in 2011 and $25.7 million for the Forest Creek Apartments in Portland in 2012.
In 2013, Security also purchased Block 136 in the Pearl District, which is the former home of the Pacific Northwest College of Art. PNCA moved into the historic former post office building at 511 N.W. Broadway in 2015.
Security is planning to build two buildings on Block 136: a 75-foot building with ground floor retail and either office or residential above and a 150-foot tower with retail at ground level and apartments above.
 

Boston-Based Intercontinental Likes Napa

February 25,2015

Natalie Dolce - National Executive Editor - GlobeSt.com
NAPA, CA—Intercontinental Real Estate Corporation a national real estate investment, development, and management firm headquartered in Boston has acquired Saratoga Downs Apartments in Napa, CA. This acquisition was led by Jessica Levin, director of acquisitions and Allen Logue, associate director of acquisitions.
Intercontinental acquired the property in a joint venture with Seattle-based Security Properties. Intercontinental Real Estate tells GlobeSt.com that the purchase amount was $58.5 million. We have also learned that Seth Siegel and Jason Parr of Cushman & Wakefield were the listing brokers for the property.
As GlobeSt.com reported in 2013, Ridge Capital Investors LLC and Redwood Real Estate Partners acquired the 124-unit apartment community along with Sheveland Ranch Townhomes for a combined price of $39.5 million.
Levin notes that “Saratoga Downs presents an opportunity to invest in a class A apartment and townhome community in the supply constrained Napa market. We believe the appealing unit mix featuring 54 larger recently constructed townhome units combined with the neighborhood’s strong demographic profile, nearby retail amenities and employment centers makes Saratoga Downs a great long term investment for our investors.”
According to Mark Hoyt, senior director of investments at Security Properties, several factors prompted the pursuit of this asset.
“The North Bay has been a target market for several years as cap rates are higher and supply is restricted compared to adjacent submarkets. It is extremely difficult to build new product in Napa evidenced by the fact only two market rate apartment properties have been delivered in the past decade with two more projected to be delivered in the next decade. The quality of the property is excellent and we are proud to include it in our portfolio.”
Saratoga Downs Apartments is a class A apartment community with 124 garden style apartments and 54 newly constructed townhomes. The property is located conveniently off of Highway 29 with quick access to Highway 12, Interstate 80, and Highway 101, offering a short commute for residents working in both the Napa Valley and Greater San Francisco Bay Area. Community amenities include a new clubhouse, state-of-the-art fitness center, barbeque and picnic area, playground, gazebo, bocce ball courts, fire pit, lounge and outdoor kitchen. Units consists of one-, two-, three- and four-bedroom floorplans as well as detached townhome configurations. The apartments include in unit washer/dryer, balcony, granite countertops, walk-in closets, and garages or covered parking.
 

Security Properties Fund II and PCCP Acquire Element 170 Apartments in Beaverton, Oregon

February 25,2015

PR Newswire
Security Properties, in a joint venture with PCCP, LLC, has purchased Element 170 Apartments, a new construction, Class A, 243-unit multifamily property for $39 million through its Security Properties Multifamily Fund II. Located in Beaverton, Oregon, a Portland suburb, the property is the latest of eight acquisitions in the fund.
Element 170 Apartments was placed under contract in October 2013, began leasing in May of 2014, stabilized operations in January 2015 and was acquired in February 2015 by the joint venture. The location and the quality of the asset made the purchase compelling. It is immediately adjacent to the Blue MAX Light Rail Station with easy access to downtown Portland and the airport. It is within two miles of the Nike World Headquarters and approximately five miles from the Intel campus.
According to Mark Hoyt, senior director of Investments at Security Properties, "Element 170 is a great purchase as it is walking distance to a MAX station and close to several major employers, hospitals and retail. The property and the location are ideal, and we expect these factors to contribute to better-than-market revenue growth during our hold period. Finally, we were able to structure the purchase contract to lock in the price in the fourth quarter of 2013. This was an excellent outcome for our investors."
The 9.3-acre property consists of 10, four-story buildings and a leasing office/clubhouse building with amenities that include a pool, fitness center, conference room and tot lot. The upgraded units offer custom cabinetry, in-unit washers and dryers, 9-foot ceilings and vaulted ceilings in all top floor units.
"PCCP is pleased to partner with Security Properties, an experienced multifamily owner and manager throughout the Pacific Northwest," said Erik Flynn, managing director with PCCP, LLC. "The Portland region is one of the nation's top-performing areas for economic growth and this new property is well-suited to meet the needs of a growing population base seeking best-in-class apartment living."
About PCCP
PCCP, LLC is a premier real estate finance and investment management firm focused on commercial real estate debt and equity investments. PCCP has approximately $6 billion in assets under management on behalf of institutional investors. With offices in New York, San Francisco and Los Angeles, PCCP has a proven track record for providing real estate owners and investors with a broad range of funding options to meet capital requirements. PCCP originates and services each of its investments, ensuring that clients benefit from added value and outstanding investment returns. Since its inception in 1998, PCCP has successfully raised, invested and managed approximately $10 billion of institutional capital through a series of investment vehicles including private equity funds, separate accounts and joint ventures. PCCP continues to seek investment opportunities with proven operators seeking fast and reliable capital.
About Security Properties
Security Properties is a national real estate investment and operating company headquartered in Seattle, Washington. For more than 45 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Since its founding, Security Properties has acquired or developed over 70,500 residential units exceeding $3.94 billion in cost. Security Properties maintains a focused multifamily strategy supported by integrated teams of professional acquisition, development, construction, investment and property management specialists.
 

Security Properties Multifamily Fund Acquires 178-Unit Saratoga Downs in Napa, California

February 19,2015

MultifamilyBiz.com
APA, CA - Security Properties, in a joint venture with Intercontinental Real Estate Corporation, purchased the 178-unit Saratoga Downs Apartments for $58,050,000 through its Security Properties Multifamily Fund II. The property, located inside the city of Napa, California is the latest of eight acquisitions in the fund.
Napa Valley is the epicenter of wine production in North America which is enhanced by a robust tourism industry. The City of Napa has undergone significant development in recent years and hosts a revitalized downtown with a variety of shops, restaurants, and lodging. In addition, Napa is located 45 miles from San Francisco and is exposed to the impressive economic catalysts in the greater Bay Area.
Saratoga Downs was built in two phases on land previously occupied by the Shevland Ranch that was once a horse farm and race track. The first phase was constructed in 2006 and features 124 garden style units. The second phase consisting of 54 townhome style units was constructed in 2012. The clubhouse / leasing office for the property is a completely reconstructed horse barn which maintained many of the original characteristics.
The property is well built and is one of only five Class A apartment communities in the city. The property is nestled in a neighborhood about two miles south of downtown Napa and neighbors the Napa Yacht Club, which features access to the Napa River that feeds into the San Francisco Bay.
According to Mark Hoyt, senior director of Investments at Security Properties, several factors prompted the pursuit of this asset.
"The North Bay has been a target market for several years as cap rates are higher and supply is restricted compared to adjacent submarkets. It is extremely difficult to build new product in Napa evidenced by the fact only two market rate apartment properties have been delivered in the past decade with two more projected to be delivered in the next decade. The quality of the property is excellent and we are proud to include it in our portfolio."
Jessica Levin, director of Acquisitions at Intercontinental commented, "Saratoga Downs presents an opportunity to invest in a Class A apartment and townhome community in the supply constrained Napa market. We believe the appealing unit mix featuring 54 larger recently constructed townhome units combined with the neighborhood's strong demographic profile, nearby retail amenities and employment centers makes Saratoga Downs a great long term investment for our investors."
 

41-story tower starts today on Minor Ave

February 2,2015

Journal Staff - Daily Journal of Commerce
Crews from Andersen Construction Co. are preparing to break ground today on a 41-story mixed-use tower called Kinects that Security Properties is developing in the Denny Triangle.
Bumgardner is the architect. The tower is at 1823 Minor Ave., and will have 356 apartments, 4,800 square feet of retail and 315 parking spaces.
Kinects is expected to open in early 2017.
The top two floors will be penthouse units, and the top floor will have a swimming pool and outdoor spaces.
In 2008, Security Properties said it planned to break ground on the tower by mid-2009, but by then the recession was in full swing. Kinects remained on the shelf until last year, when Security Properties filed applications with the city to prepare for construction.
The block is bounded by Stewart, Howell, Boren and Minor, and it will see a lot of change in the next few years. Security Properties' project is next to the site at 1121 Stewart St. where RBF Property Group and GIS International Group are planning a 42-story condo and hotel tower.
On the other half of the block, Touchstone Corp. is planning Tilt 49: an 11-story office building and 36-story residential tower.

2014

 

Security Properties Acquires Affordable Apartments for $13.2M

December 23, 2014

Keith Loria - Contributing Editor - Multihousing News
Colorado Springs, Colo.—Security Properties has teamed with Enterprise Community Investment Inc. and the Colorado Springs Housing Authority to acquire Winfield Apartments, a 160-unit apartment community in Colorado Springs, Colo., for $13.2 million, from Academy Heights Housing Partners.
This marks the second joint venture between Security Properties and Enterprise this year, as the partnership acquired the 220-unit Reserve at Northglenn Apartments located in Northglenn, Colo. in February.
“This fits with our company philosophy. Ownership was attracted to the quality property located in a growing and dynamic area of Colorado Springs,” Bryon Gongaware, Security Properties’ managing director, Affordable Housing Group, tells MHN. “This property is the ideal affordable housing acquisition target for Security Properties, as it is high quality real estate that is well located with opportunities for operational improvements over long-term ownership.”
Located at 6134 Romley Point, Winfield Apartments is a garden-style apartment community that contains a mix of two- and three-bedroom apartments and consists of affordable apartments for individuals and families earning less than 60 percent of area median income.
Property amenities include a clubhouse, fitness center, laundry facility, professional on-site management, playground, barbeque area, available parking garages, in-unit washer/dryer hookups, balconies/patios, and air conditioning. There’s also an open green space with a park immediately across the street.
According to Gongaware, ownership will address deferred maintenance and landscaping throughout the property, with opportunities for improved energy efficiency.
Built in 2001, Winfield offers residents convenient access to major business, retail, and entertainment hubs throughout Colorado.
“The property is ideally located across the street from Pring Ranch Park and Odyssey Elementary School, within two blocks of quality commercial retail and easy access to transportation corridors along N Power Boulevard and Stetson Hills Boulevard,” Gongaware says.
The acquisition partnership assumed existing Fannie Mae financing and sourced a supplemental, co-terminus, Fannie Mae loan through Citi.
This acquisition marks the fifth property Security Properties has made in Colorado over the past two years, but it is the company’s first purchase in Colorado Springs. In total, it now owns nearly 1,660 apartments in the state.
 

Revamped Pearl District apartments go for $37M

December 3, 2014

Jon Bell - Staff Reporter - Portland Business Journal
Two-and-a-half years ago, Seattle's Security Properties, with the help of Lubert-Adler Partners of Philadelphia, bought out its original partner in the Pearl District's Honeyman Hardware Lofts for $20.5 million.
Last week, Security Properties and Lubert-Adler sold the 100-unit Pearl District apartments for $37.1 million to San Jose real estate investment firm DiNapoli Capital Partners.
HFF brokered the deal, which was first reported by the Real Estate Alert newsletter .
The three-building property, located at 555 N.W. Park Ave., includes about 11,000 square feet of retail space. Before a renovation in 1991, the buildings housed a hardware store and warehouse space.
After Security Properties and Lubert-Adler bought out Equity Resource Group in 2012, the firms invested $4.6 million in a renovation that boosted the housing component up from 89 units to 100. About 15,000 square feet of retail space was converted into work-live lofts as part of the remodel.
Security and Equity originally bought the property in 2006 intending to redevelop the site with an additional 49 rental units. Instead, they put the property on the market in the fall of 2011 until Security and Lubert-Adler bought out Equity in July 2012.
 

Seattle developer, in stepping up Portland activity, breaks ground in NoPo

October 21,2014

By Jon Bell - Staff Reporter - Portland Business Journal
North Portland's latest mixed-use project got underway this week when ground broke for Security Properties' four-building project at North Williams Avenue and North Mason Street.
The Seattle developer will build four buildings, three with ground-floor office and retail space, totaling more than 352,400 square feet. The retail and office space will offer just over 26,100 square feet of space. Plans call for 268 apartments on the upper levels.MORE
The new development will also include a central woonerf — a pedestrian alley of sorts — and ample bike parking.
Security, which bought the 91,000-square-acre North Portland property in 2013, has been dabbling in Portland since at least 2006 and has become more active in the metro region in recent years. It paid $11 million for the Honeyman Hardware Loft Apartments in the Pearl District in 2006, $34.3 million for three Beaverton apartment complexes in 2011 and $25.7 million of the Forest Creek Apartments in Portland in 2012.
In 2013, Security also purchased Block 136 in the Pearl District, which is the current home of the Pacific Northwest College of Art. PNCA plans to move into the historic former post office building at 511 N.W. Broadway in 2015.
After that move, Security is planning to build two buildings on Block 136: a 75-foot building with ground floor retail and either office or residential above and a 150-foot tower with retail at ground level and apartments above.
Some nearby residents are not happy with the proposed tower and have formed a group to oppose it.
 

Newport Crossing apartments in Newcastle sell for $38.8M

November 12,2014

By Ben Miller - Contributing Editor - Puget Sound Business Journal
Security Properties Inc. said it's sold the Newport Crossing apartments in Newcastle for $38.8 million, two years after it bought the 192-unit apartment property for $30.35 million.
Seattle-based Security Properties said it spent $1.5 million in the past two years to repaint and reroof buildings, redesign the community pool, improve landscaping and upgrade unit interiors.
"The purchase, renovation and sale of Newport Crossing reflects our overall strategy of pursuing multifamily real estate investment opportunities in high-growth western markets characterized by sustainable job and population growth, significant barriers to development and high homeownership costs," said Security Properties CEO David Dufenhorst, in a statement.
 

North Portland building razed

October 16,2014

By Sam Tenney - DJC Oregon
Crews with LOI Environmental & Demolition Services are demolishing a nearly 40,000-square-foot building on the North Williams Avenue/Vancouver Avenue corridor to make way for a large mixed-use development. Andersen Construction is the general contractor on the project, designed by Myhre Group Architects for Seattle-based owner Security Properties.
Three buildings with a total of 268 residential units and over 25,000 square feet of ground-floor commercial space will be built on the site. A six-story building will occupy the north-facing portion of the block along North Skidmore Street, a five-story building will run along North Williams Avenue, and a three-story townhome-style building will be built along North Vancouver Avenue. The development will also contain a subgrade parking garage with 237 parking stalls.
 

Leadership Changes at Security Properties

October 2,2014

By David Phillips | West - GlobeSt.com
SEATTLE—Multifamily real estate investor, developer and operator Security Properties says that its long-time chief executive officer and president John Orehek has retired.
Leveraging the firm’s deep and talented employee base, Security Properties’ chairman Paul Pfleger has named long-time executive David Dufenhorst (previously chief investment officer) and Tim Overland (previously chief operating officer) as CEO and president, respectively.
The new team will focus on repositioning the firm’s asset base into newer and more geographically focused target markets.
“I am extremely honored to take over the leadership of such a great organization and I look forward to working closely with our talented team to grow and strengthen Security Properties,” said CEO David Dufenhorst. “Tim Overland, the newly appointed president, and I – along with the rest of our senior management team – have ambitious plans to strategically expand our asset base and strengthen our balance sheet. Our goal is to continue providing outstanding returns to our investors and outstanding service to our residents.”
A seasoned real estate industry professional with more than 25 years’ experience in real estate— including asset management, acquisitions, dispositions, development, joint ventures, financing, tax planning and accounting—Dufenhorst has been with Security Properties for more than eight years.
Previously, he served as president of Torino Holdings, where he worked for thirteen years and completed more than $1 billion in transactions in the southwest region. Dufenhorst is a member of the several professional real estate associations. He has a masters degree in Real Estate Development from University of Southern California and Bachelors of Science in Business from the University of Idaho.
“We believe that our company is extremely well positioned for continued profitable growth, with an outstanding team in place, a compelling new business pipeline, and a focused multifamily strategy,” said President Tim Overland.
Throughout his career, Overland has been involved in the investment of more than $2 billion in real estate equity. Prior to joining Security Properties in 2008, he held investment positions with MacFarlane Partners as well as consulting roles at Arthur Anderson and PricewaterhouseCoopers.
A member of the Young Presidents’ Organization, Overland has a bachelor’s degree in economics from the University of Puget Sound and an MBA from the Haas School of Business at the University of California Berkeley. He is also a member of National Multi Housing Council, the Affordable and Workforce Housing Council of the Urban Land Institute and serves on the Board of Directors for Seattle-area non-profits Bellwether Housing and Washington Wild.
 

Orehek Announcement

August 27,2014

Security Properties - Announcement - August 27, 2014
Multifamily real estate investor, developer and operator Security Properties today announced that after more than 20 years with the company, John Orehek will retire as president and CEO at the end of September.
At that time, David Dufenhorst, chief investment officer, and Tim Overland, chief operating officer, will respectfully assume the roles of CEO and President.
“The entire company owes John an enormous debt of gratitude,” said Security Properties’ Chairman Paul Pfleger. “Under his leadership, Security Properties evolved from its origins as a fiduciary to many private investors into a highly-respected developer, investor and operator of institutionally-capitalized residential real estate. During John’s term as CEO, the company acquired or developed more than $2.2 billion in real estate assets throughout the United States. John built a talented and cohesive team, which has created great value for Security Properties’ investors, employees and owners.”
He added, “We are delighted that members of that team will assume the leadership role and that John will remain as a trusted advisor to the company after the transition.”
 

Security Properties Grabs Mesa Apartments for $30M

August 11,2014

By Kristian Seemeyer - GlobeSt.com
Security Properties, along with an East Coast life insurance company, teamed up to acquire Sonora Canyon, a 388-unit apartment community in Mesa for $30 million. Security Properties had previously purchased the property in 2005, then known as University Green, for $22 million and sold it in 2007 for $33.3 million.
With this new acquisition, Security Properties is planning $2.6 million in upgrades over the next three years. The renovation scope of work includes an upgrade to the clubhouse, pool; exterior lighting and exterior paint, along with some value add unit interior improvements.
Along with other primary and secondary Western US markets, Security Properties has been active in the Phoenix Metro and its surrounding submarkets for more than a decade and it’s attracted to the area's continued population growth and the continued diversification of its employment base into the healthcare, technology, alternative energy and semiconductor sectors.
According to David Dufenhorst, chief investment officer at Security Properties, several factors prompted the pursuit of this asset. "Sonora Canyon provided us and our partner with a unique opportunity to buy an asset we knew extremely well at a significant discount to replacement cost along with the potential to add numerous value add upgrades and the catalyst of a light rail station being completed within walking proximity to the property in 2018."
 

Security Properties buys land for 309 apartments in Spring District

August 1,2014

By Nat Levy - DJC Staff Reporter
An entity related to Security Properties bought land from Wright Runstad & Co. for a five-building apartment complex, which will be the first project in the 36-acre Spring District in Bellevue.
Property records show Security Properties paid $10.7 million for the land.
The buildings will range from three to nine stories and have a total of 309 units.
Michael Nanney, director of multifamily development for Security Properties, said the goal is to start construction by the end of the year. Security Properties is seeking building permits from the city.
Construction of the five structures will start at the same time, but they open separately, Nanney said. They will share an underground parking garage.
The location is on the southwest corner of the Spring District — along Northeast 12th Street between 120th and 124th avenues northeast. Nanney said being on a corner will allow the apartments to function as a standalone complex until the rest of the Spring District is built.
A landscaped staircase at the corner of Northeast 12th Street and 120th Avenue Northeast will serve as a pedestrian entrance to the Spring District. “We are going to have a signature project that I think is going to help put the Spring District on the map,” Nanney said.
GGLO is the architect and Walsh Construction Co. is the general contractor. Other team members are Triad Associates, Bumgardner and Cary Kopczynski & Co.
The apartments will sit about 30 feet above street level, giving every unit a view, Nanney said.
Open space will be a big feature for the apartments. Wright Runstad will build a two-acre park across the street. A Sound Transit East Link light rail station will be on the north end of the park.
Nanney said the buildings will occupy about 60,000 of the 110,000 square feet of land Security Properties bought. That leaves 50,000 feet for open space.
Ground-floor units will be offered as live-work spaces, but could be quickly converted to retail later, Nanney said, “as soon as the vibrant walkable streetscape of the Spring District comes to life.”
Security Properties has an option to develop another 225 units on an adjacent parcel.
Greg Johnson of Wright Runstad told the DJC last year he chose Security Properties to do the apartments because he likes its unique designs.
Wright Runstad and Shorenstein Properties are developing the Spring District. The $2.3 billion project will have 5.3 million square feet of offices, retail, housing and parks when it is done.
Wright Runstad's first phase will be two office buildings totaling 491,120 square feet. NBBJ is designing the office buildings, and Howard S. Wright Cos. is the general contractor.
Jeff Watson, Grant Yerke and Matt Schreck of Broderick Group are listed as brokers for the office buildings.
 

Value of big apartment complex in Everett tumbles

June 19,2014

By Marc Stiles Staff Writer - Puget Sound Business Journal
In the second largest apartment sale so far this year in Snohomish County, Security Properties has paid $63.5 million for the Millington at Merrill Creek Apartments in Everett.
Seattle-based Security Properties last week paid 15 percent less than what the seller paid for the 344-unit property in 2007, at the height of the market and when the property was new. Public records show that Dallas-based Invesco Real Estate had paid just over $74.3 million for the 32-acre property.
The Millington is at 1401 Merrill Creek Parkway, two miles from the Boeing plant where 30,000 people currently work. Boeing's (NYSE: BA) work force will grow by more than 8,500 with the manufacture of the 777X jetliner.
"We believe we have acquired a quality asset at a compelling price at the right time,” Security Properties Director of Acquisitions Barrett Sigmund said in a statement.
In addition to the property's proximity to Boeing, another positive factor is that few apartments are being built in Snohomish County relative to demand, Security Properties Chief Operating Officer Tim Overland said.
Of the approximately 10,125 units expected to be completed in the tri-county region this year, only about 1,400 are in Snohomish County, according to Dupre + Scott Apartment Advisors, a Seattle company that tracks the multifamily market. The vast majority are in King County.
Overland said the Millington is the third acquisition by Security Properties Multifamily Fund II, and the fund’s second investment in the Puget Sound region. The fund now owns 722 apartment units. Security bought the Millington in a joint venture with an unnamed institutional partner.
Overland said his company has set aside $1.8 million for upgrades to both the interior and exterior of the property.
Snohomish County's largest apartment sale so far in 2014 occurred in March, according to Jones Lang LaSalle apartment broker Seth Heikkila, when Kennedy Wilson bought the 372-unit Bailey Farm Apartments in Bothell for $91.5 million from the Wolff Co.
 

Sound Transit narrows list for Capitol Hill TOD

May 22,2014

By Journal Staff - DJC.com
Sound Transit has selected the finalists to develop four sites around the future Capitol Hill light rail station.
The teams now are invited to submit development proposals.
Here are the short-listed firms: Gerding Edlen, Lowe Enterprises Investors, MacFarlane Partners, Security Properties, The Wolff Co., Bellwether Housing and Lennar Multifamily Communities. Capitol Hill Housing made the list individually and also as part of a team with Jonathan Rose Cos.
Three of the teams want to develop all four sites: Capitol Hill Housing and Jonathan Rose, Gerding Edlen and MacFarlane Partners. The other teams want to develop one or more sites.
Fourteen groups responded to the agency's request for qualifications. CenterCal Properties, Emerald Bay Equity, Lake Union Partners, TOD Housing LLC and Westbank Projects Corp. responded to the RFQ but have not been asked to submit proposals.
A minimum of 397 apartments could be built on four sites on Broadway, between East John Street and Seattle Central Community College. At least 36 percent of the units will be reserved for low-income housing.
Sound Transit has said it wants the new development to include a public plaza for Broadway Farmers Market.
Sound Transit and a neighborhood advocacy group called Capitol Hill Champion will hold a public meeting at 5:30 p.m. June 2 in Broadway Performance Hall at 1625 Broadway so people in the community can meet the short-listed developers.
Construction on the sites won't begin until after the station is complete in 2016. Proposals are due in September, and Sound Transit said it wants to pick the winning proposals in October.
Each site has specific requirements. Some must be mixed-use, others must be low-income housing and others must participate in the city's Multifamily Property Tax Exemption program.
The Capitol Hill station is part of the $1.8 billion University Link light rail line, a 3.1-mile route from downtown to Capitol Hill and the University of Washington. The line is entirely underground.
Sound Transit said it is more than $100 million under budget and six to nine months ahead of schedule.
 

Security Properties Grabs 192-Units in Las Vegas

April 22,2014

MHN Online - Multihousingnews.com
Las Vegas—Security Properties has completed its first property acquisition in Las Vegas with the purchase of Desert Shadows. The 192-unit community is located near the Summerlin submarket of northwest Las Vegas, and is is the second purchase by Security Properties Multifamily Fund II.
The asset was acquired for $23 million through a joint venture with a larger institutional player. Grandbridge/BB&T Bank provided the mortgage financing, and Security Properties will use its integrated property management company, Madrona Ridge Residential, to run day to day operations. In addition, the firm plans to inject $1.1 million in capital to enhance the leasing office, paint the exterior, upgrade landscaping and enhance common area amenities. The property will also be rebranded as CenterPoint.
“The combination of a high-quality asset purchased off-market and the property’s proximity to employers and amenities made this a smart strategic investment for us,” says David Dufenhorst, chief investment officer at Security Properties.
The seller was a local developer, who built the asset in 2007.
 

Purchase of Reserve at Northglenn

April 21,2014

SEATTLE – Security Properties Inc. has acquired the 220-unit Reserve at Northglenn Apartments located in Northglenn, CO for $23.5 million.
The Class A property located at 11450 Community Center Drive consists of affordable apartments for individuals earning less than 60 percent of area median income. The property represents the fourth such acquisition by Security Properties in Denver over the last fourteen months. With the acquisition, Security Properties now owns approximately 1,500 apartment units in Denver.
“Denver is one of our main strategic growth markets given the strong market fundamentals and quality lifestyle experiences for our residents.” said Bryon Gongaware, Managing Director of the firm’s Affordable Housing Group.
Security Properties teamed with Enterprise Community Investment, Inc. and Adams County Housing Authority to acquire the property from SunAmerica and Trammell Crow Residential. “We are excited about the key partnerships we structured with Enterprise and Adams County Housing Authority for the preservation of this quality affordable housing community,” added Gongaware.
Built in 2001 the community provides residents with convenient access to downtown Denver, retail and employment centers and recreational options. The property is a mix of one-, two- and three-bedroom units and includes washer and dryer hookups in each unit, an outdoor pool, fitness center and garages.
Security Properties will invest additional capital for improvements to both the interior and exterior of the property. Along with the improvements, additional units will be set-aside for residents earning 30 and 50 percent of area median income.
Sellers were represented by Tim Flint of Tax Credit Group of Marcus and Millichap, and Fannie Mae financing was provided by Tim Leonhard of Oak Grove Capital.
For more than 40 years, Security Properties has provided quality housing to its residents as well as excellent financial performance for its investors. Over time, Security Properties has acquired or developed over 66,500 residential units at a cost of over $3.35 billon. Security Properties maintains a focused multifamily strategy supported by integrated teams of professional acquisition, development, construction, investment, and property management specialists.
Enterprise works with partners nationwide to build opportunity. They create and advocate for affordable homes in thriving communities linked to jobs, good schools, health care and transportation. Enterprise lends funds, finance development and manage and build affordable housing, while shaping new strategies, solutions and policy. Over more than 30 years, Enterprise has created 300,000 homes, invested nearly $14 billion and touched millions of lives.
Adams County Housing Authority has a 40 year history of providing a range of affordable housing options to the residents of Adams County, Colorado.
 

New 268-apartment project at Skidmore and Williams will have a Dutch 'woonerf' space

March 11,2014

By Michael Andersen - BikePortland.org
A large lot on inner North Portland's Williams Avenue corridor would become one of the city's biggest new housing-retail projects under a proposal made public last week.
The site between Williams, Vancouver, Mason and Skidmore that currently hosts the Oregon Association of Minority Entrepreneurs and Ethiopian restaurant Dalo's Kitchen would get 268 apartments and townhouse-style units plus, 25,370 square feet of commercial space and what the architect calls a "woonerf" running down the middle of the block: a narrow Dutch-style street that allows cars to pass through but treats them as "guests."
The project is the latest in a building boom that's about to change Williams — nationally known as an example of "bike-oriented development"— in much the way Southeast Division Street has changed in the last year.
"Within two to three years, you're going to have over 1,000 new residents in that stretch, you're going to have 300 office workers," said Stephen Gomez, land use chair of the Boise Neighborhood Association. "Williams is going to be a completely different street."
The planned complex, which will consist of a six-story building along Skidmore, a five-story building along Williams and a three-story building with front stoops facing Vancouver Avenue, would sit on top of a new underground parking garage with 237 auto parking spaces, 185 of them for residents. The other 52 stalls will serve the commercial space, which will be slightly smaller than the 30,000-square-foot New Seasons store built a few blocks away in 2013.
Boise NA president Kay Newell said she's been impressed with the project's supply of auto parking — there'll be enough spaces for two-thirds of apartment dwellers to park a car on site if they choose — and its development team, which approached her and other key neighbors about a year ago, long before they even bought the site.
"They listen to our suggestions, modify them and use whatever they can," Newell said. "I wish that all of the builders had these same standards. ... We've got some good developers in the community, but these guys are outstanding."
Gomez agreed, at least as far as this project was concerned.
"They're using for the most part good-quality materials: brick, metal, good window systems," he said. "It's a good project."
A public comment period for the project's design review process began on Friday and continues through March 28.
This is the latest chapter in an interesting story for the block. Donated to the nonprofitOAME by PacifiCorp in 1990, it was sold at approximately market price 15 years later to what Willamette Week described as "a group of the nonprofit's insiders." It continues to serve as OAME's headquarters. City records show the property changed hands again last December, again at approximately market price. The city lists its current owners as a Seattle investment company and SP Williams LLC, an anonymous corporation registered in Delaware.
Here's the project's description of the "woonerf" area, which runs north-south along the route an alley might run if it were a subdivided block:
The interior of the site between the buildings is developed as a shared pedestrian and vehicle space or ‘woonerf’. Under Dutch law the term has specific legal meaning, but in North American usage woonerf generally means shared pedestrian and vehicle space with a brick or paving block surface. ... A variety of scored and colored concrete paving treatments, as well as raised planters and bollards, help to define the vehicle and pedestrian zones in the woonerf. Six units in the Williams Building face the woonerf at ground level, have attached internal garages, and are identified by the applicant as ‘live-make’ units that could serve as shared residential/commercial units. The north end of the woonerf includes a large loading stall underneath the overhanging upper floors of the Skidmore Building, which is broken apart at the ground floor ‘portal’ to provide through woonerf traffic. The western portion of the woonerf is developed as a pedestrian-focused space with stoop access to units in the Vancouver Building, large stormwater planters, and bench seating.
Woonerfs are common in the Netherlands, where they have special legal status that gives people on foot or bike the right of way. Similar designs have been popping up recently inSanta Monica and Seattle. Last summer, a new state law cleared the way for Oregon cities to, if they wish, give people on foot the right of way on residential streets that are less than 18 feet wide.
But whatever its legal status, Newell is enthusiastic about the woonerf area as a way to safely allow occasional loading and unloading while giving people a place to socialize outdoors.
"There'll be one or two commercial spaces that can open up into that space," Newell said. "It'll be like a community courtyard."
 

North Portland development’s design now more pedestrian friendly

January 22,2014

By Lee Fehrenbacher - DJC Oregon
Seattle-based Security Properties has revamped its plans for a six-story, 260-unit apartment development on the North Williams Avenue-Vancouver Avenue corridor, and the result is a more pedestrian-oriented design with smaller commercial spaces in lieu of an anchor space.
The development company last week submitted its application for a Type II design review with the Portland Bureau of Development Services, following early advisory meetings with the city and Boise neighborhood stakeholders, according to an announcement Security Properties released Tuesday.
Plans originally called for Orchard Supply Hardware to serve as the development’s anchor tenant, but the hardware retailer pulled out of the deal in September. Jeanne Muir, a spokeswoman for Security Properties, said Orchard Supply Hardware’s departure allowed redesign so that spaces would cater to pedestrians rather than truck drivers.
“It had been designed around having a 65-foot truck to serve Orchard Supply,” Muir said. “Once that no longer became key to our strategy, we were able to turn that central courtyard into much more of a woonerf.”
A ‘woonerf‘ is an area designed for pedestrians but shared by cars. Security Properties envisions a 21,000-square-foot central courtyard that leads to residential stoops, patios and the entrance to the vehicle garage, which will have 240 stalls. The company also plans to include 300 bike stalls.
Ground-floor retail space on North Williams Avenue will run from Mason to Skidmore streets, while the facade along North Vancouver Avenue will remain mostly residential. Those units are slated to be three-story townhomes in order to better mirror the single-family homes across the street, according to the announcement.
For the interior courtyard, Security Properties is introducing “live-make” units – a twist on live-work units, but with an emphasis on production. The company added the units in response to residents’ desire to continue the corridor’s industrial tradition of making things.
Security Properties closed on the purchase of the 91,000-square-foot, full city block from the Oregon Association of Minority Entrepreneurs in December for $4.2 million. OAME will remain in the existing 40,000-square-foot building until construction starts in 2015.
The project’s designers are Portland-based Myhre Group Architects and Seattle-based Bumgardner. Security Properties will present its updated plans to the Boise Neighborhood Association’s Land Use and Transportation Committee on Jan. 27, at 7 p.m., at the Q Center, 4115 N. Mississippi Ave.
Michael Nanney, director of multifamily development for Security Properties, said in a prepared statement that the company anticipates being able to potentially incorporate additional elements suggested by neighborhood residents as officials work with city staffers to finalize plans.
 

Seattle Developer Looks to Revitalize Struggling Greenwood Block

January 2,2014

By Kiersten Throndsen - KomoNews.com
SEATTLE -- Kate Martin has known it for years - 85th Street in Greenwood has a lot of potential. But, she says, support to actually turn the area around and make something happen has been missing.
So when a Seattle-based development company recently showed interest in bringing new life to the neighborhood, Martin got excited.
"That site has been pretty pathetic for a long time," she said. "It would be very good for our neighborhood to have it repaired."
Martin, a Greenwood activist who is running for Seattle mayor, said the south side of Northwest 85th Street is in need of some love and for the first time in a long time she feels hopeful that could happen with Security Properties' idea.
"This is the first time we have had a highly qualified developer who lives very close to Greenwood, and I think he understands what we need," Martin said. "This is not at all the kind of developer who will leave us with vacant commercial space on the ground floor."

In November, Security Properties approached the Greenwood Community Council with early plans for a mixed-use residential/retail development at the corner of First Avenue Northwest and Northwest 85th Street.
"We view Greenwood and Phinney Ridge as one of the next up and coming neighborhoods in Seattle," said Ned Clapp, development manager with Security Properties. "It has a long history of establishing terrific character and that's what we look for in our proposed developments."

Clapp said while they are still in the very early stages, Security Properties met with city officials to discuss their interest and their idea, which would include ground-level retail and apartments taking up roughly a two-block space, between First Avenue Northwest and Third Avenue Northwest.

The kind of development proposed in Greenwood is similar to what's been done by Security Properties in neighborhoods across Seattle, including Ballard and Fremont. The On The Park and The Epicenter developments each feature mixed-use residential complexes with grocery stores on the ground floor.

Most recently, the company announced plans for a new development called the Angeline in the heart of Columbia City. This 193-unit apartment complex along Rainier Avenue South will feature a PCC Natural Market in an area of town Security Properties says has been lacking a full-service grocery.

The success these developments have seen in securing big-name anchor retail tenants is something Angela Cherry, a member of the Greenwood Community Council, believes could really help their neighborhood. "For the most part the (Greenwood Community) Council's response was pretty positive," Cherry said. "This is a space that has been vacant for several years, and it tends to have a harder time getting successful businesses to stay."

Security Properties is moving forward with concept and design plans for the Greenwood site, but Clapp said they are also waiting to see what happens with a proposed rezone along the south side of 85th Street.

The rezone under consideration includes a pedestrian overlay, which according to the Greenwood Community Council could create disadvantages for ground floor businesses wanting to open along that stretch of road due to parking limitations.
In December, the community council submitted a letter to the city in opposition of the pedestrian overlay proposal, asking city officials to leave the zoning on the south side of 85th Street as it stands today - neighborhood commercial without a pedestrian overlay.

The Planning, Land Use and Sustainability Committee will take this issue up during a meeting in late February, and depending on the outcome of the meeting Security Properties' development plans for the Greenwood could change.